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on october 1, at the end of september, with the support of a series of heavy-handed policies, the capital market's bullish sentiment was fully activated. all major a-share indexes entered a technical bull market, and the transaction volume on friday also reached an unprecedented 2.6 trillion. based on the current situation, investors are most concerned about what they should pay attention to now and how the market will perform in the future. taking history as a guide, we may be able to find some clues.

non-bank finance performed strongly in the initial stage of the bull market

the bull market is a perceptual understanding and a vague concept. the core of the bull market is a strong money-making effect. the superficial characteristics are that the index rises, most stocks rise, and otc funds enter the market. in the history of a-shares, there have been two typical bull markets with high growth rates and long duration. the incidents occurred from june 6, 2005 to october 16, 2007, and from july 2014 to june 2015.

affected by factors such as the share-trading reform and the appreciation of the rmb, the a-share market ushered in a magnificent bull market from 2005 to 2007. the shanghai stock index rose from around 1,000 points to more than 6,000 points. the highest point of the shanghai stock exchange index at 6,124 points has not been surpassed to this day. . in this bull market, non-bank finance, non-ferrous metals, and national defense and military industries all increased by more than 1,100%.

affected by factors such as the launch of shanghai-hong kong stock connect and shenzhen-hong kong stock connect, as well as loose monetary policies, the a-share bull market started again from 2014 to 2015, with the shanghai stock exchange index rising from around 2,000 points to over 5,000 points. oriental fortune statistics show that the top two sectors leading the gains in this bull market are computers and media, both with increases of more than 340%.

it is worth mentioning that according to the statistics of founder securities, in the 2015 bull market, the non-bank sector had obvious advantages in the start of the bull market (2014/07-2014/10) and the establishment stage (2014/10-2015/01). among them, in the establishment stage, the growth rates of securities, insurance, and diversified finance reached 104.4%, 76.6%, and 50% respectively, far exceeding the 35.8% growth of the shanghai stock index.

how to grasp the market rhythm?

looking over a long period of time, a good market usually experiences a gentle rise in the early stage, a rapid rise in the mid-term, and a shock peak in the later stage. among them, the mid-term rebound has the strongest amplitude and the longest duration.

the factors that determine the market situation at different stages are also different. according to a research report released by huajin securities on september 28, the three stages of a-share rebound after the historical bottom are based on policy in the early stage, fundamentals in the mid-term, and fundamentals and external events in the final stage.

in the early stage of the rebound, major positive policies and external events are the core factors affecting the market. in the mid-term rebound, fundamentals are the core factor driving a shares to rise further, while a shares are less sensitive to negative policies or events. at the end of the rebound, a-shares are mainly affected by external events, fundamentals, valuation, etc.

in terms of the pace of the rebound, huajin securities pointed out in a research report that after repeatedly crossing the bottom, the market tends to seek relatively stable investment opportunities. in the early stage of the rebound, procyclical-related finance, real estate, cycle, and consumption performance dominate. after the rebound stabilizes, the index enters a rapid upward rebound period. during the mid-term period of the rebound, industries with upward industry trends dominate. after the rebound stabilizes, when the index enters the final peaking stage, during the late rebound period, industries with high prosperity are more dominant.

huajin securities believes that the current rise is still in its early stages and is likely to continue in the short term. the post-holiday period may enter the mid-term period of rebound, so short-term financial real estate and core assets will dominate, while the growth of small and medium-sized companies such as technology is worthy of deployment.