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Macro US Stocks

China Merchants Strategy: A-share indicators near historical bottom range

China Merchants Strategy said in a research note that after the recent rapid selloff, multiple A-share indicators have approached historical bottom ranges. Trading volume has shrunk markedly and turnover has fallen to levels near past major bottoms, while mid- and long-term funds led by ETFs are accelerating into the market and stabilization efforts are intensifying. The note said the market bottom often leads the fundamental bottom, with earnings and PPI still improving and providing a positive driver for A-shares.

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AI take

The significance here is less the bottom call itself than the evidence cited for it: shrinking turnover alongside accelerating ETF inflows suggests a market where selling pressure is exhausting while institutional money builds positions. That mix matters most for domestic mid- and long-term allocators and ETF issuers, whose flows are increasingly the marginal support. The open question is whether the earnings and PPI improvement the note leans on proves durable enough to validate the bottom before flows reverse; stabilization efforts intensifying also implies policy dependence that markets will keep testing.

Generated by AI for reference only.

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