Special: A-Share Oversold Recovery – Small-Scale "Red October" Looks Promising
◎ Reporter He Kui
On the first trading day after the National Day holiday, China's three major stock indices closed lower collectively, with the ChiNext Index falling more than 3%. On 10, Shanghai Securities News interviewed senior executives from multiple insurance capital institutions and learned that, amid domestic and international uncertainties, the A-share market continues to fluctuate near its bottom. However, following the sharp correction in Q3, insurers remain optimistic about market performance in Q4.
Executives from multiple insurance capital institutions stated that Q4 capital market volatility is expected to decrease, opening a window for rebound. The market will likely see structural recovery, with a focus on value and defensive sectors. For tech growth, priority should be given to companies with high earnings certainty.
From a medium-term perspective, A-shares remain in an earnings recovery phase. The sharp market pullback in Q3 created a favorable entry point; we will maintain a neutral-to-bullish equity allocation. As Q3 results are gradually disclosed, investors should prioritize technology and growth stocks with strong earnings upside potential.
Huatai Asset believes that the current market weakness stems primarily from domestic factors such as weak internal demand and capital outflows. In the short term, the market is expected to remain volatile while consolidating at lower levels, with a potential turnaround contingent on marginal policy shifts in China's domestic policy in the fourth quarter.
Industry sources report that during the market pullback in the third quarter, some insurance capital institutions increased their equity asset allocation. A senior investment executive at a major insurer told reporters: "Since the end of 7, we have actively increased our equity allocations. From a medium-to-long-term perspective, we remain optimistic about China's economy and capital markets, and will seize opportunities to build positions at lower levels while adhering to our 'high dividend + tech growth' strategy. Our technology investments are focused on sectors with clear earnings visibility."
The research activities of insurance capital institutions may indicate their future strategic direction. According to Choice data, in the third quarter of 2026, insurance capital institutions showed high research engagement, with over 150 institutions participating and covering more than 700 listed companies. Technology and growth-oriented companies were the primary focus of these research efforts.
Data shows that among the insurance capital institutions surveyed, pension insurers demonstrated significantly higher survey engagement. China Life Pension, Taiping Pension, Ping An Pension, and Changjiang Pension led in the number of surveys conducted. Among the 700+ listed companies surveyed, more than half were technology firms, indicating strong interest from insurance capital in the tech sector.
Amidst a volatile market environment, insurers will proactively execute tactical asset allocation to respond flexibly. A senior investment executive at one of the major insurers stated that market volatility is raising the bar for tactical allocation, requiring precise timing and seizing opportunities from sector rotations. Looking ahead, without policy stimulus, the market is unlikely to see a broad-based rebound; structural opportunities are expected to dominate. Investment selection should focus on companies with solid fundamentals and attractive valuations.
Looking ahead, Huatai Asset Management stated it will maintain a cautiously optimistic stance in its allocation strategy, managing positions and drawdowns while focusing on sectors supported by strong performance and profitability as validated by the third-quarter earnings reports. Priority will be given to growth sub-sectors with industry trends consistently exceeding expectations and upgraded outlooks for next year, as well as assets valued at historical lows with a solid value floor.
