Analysis of Market Trends and Sector Rotation Patterns Post-Trillion-Yuan Turnover in Shanghai and Shenzhen Stock Markets

Based on the above data and analysis, I will provide you with an in-depth report on market patterns and sector rotation after the turnover of Shanghai and Shenzhen Stock Markets exceeds one trillion yuan.

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From 2025 to early 2026, the A-share market witnessed a historic period of trading activity.

[1]. The following points are of particular note:

Time Node	Turnover Level	Market Performance
2024 September “924 Market Rally”	Surged from 800 billion yuan to over 3 trillion yuan	Policy bottom confirmed; index soared from 2700 points to 3600 points
August-October 2025	Exceeded 2 trillion yuan for 40 consecutive trading days	Shanghai Composite Index broke 4000 points, hitting a 10-year high
December 2025-January 2026	Broke 2 trillion yuan for 5 consecutive trading days	Shanghai Composite Index recorded 13 consecutive positive closes, with new highs in volume-price coordination

The current market shows a healthy trend of

. The balance of margin trading and securities lending reached a record high of on January 5, 2026, accounting for 2.55% of the circulating market value of A-shares[2]. This data indicates that leveraged funds are actively entering the market, providing sufficient capital support for the market trend.

According to the latest data, the current incoming capital shows diversified characteristics:

• Foreign Capital
  : The turnover of Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect exceeded one trillion yuan for the first time in a full year, reflecting international capital’s continued optimism towards A-shares[2]
• Institutional Capital
  : Public funds and insurance capital are actively deploying in the “New Year Kick-off” phase
• Leveraged Capital
  : The turnover of margin trading and securities lending accounts for 11.34% of A-share turnover, with active margin purchases
• Hot Money and Retail Investors
  : The total turnover on the Dragon and Tiger List reached 5.56 trillion yuan, hitting a record high[2]

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Through a review and analysis of A-share historical data, the market usually presents the following patterns after turnover exceeds one trillion yuan:

1. High Volume Leads to High Price
   : Sustained turnover expansion ( >1.5 trillion yuan) is often accompanied by index increases; “volume precedes price” is an important leading indicator
2. Driven by Incremental Capital
   : Turnover expansion usually indicates the entry of incremental capital, rather than stock capital game
3. Strength Continuity
   : Within 1-3 months after turnover exceeds one trillion yuan, the probability of market rise exceeds 70%

1. Volume Expansion with Stagnant Price
   : Sharp turnover expansion but stagnant index may be a short-term top signal
2. Imbalance Between Gainers and Losers
   : If the number of gaining stocks is far less than that of losing stocks, be alert to the risk of “2-8 divergence”
3. Capital Divergence
   : Net outflow of northbound capital combined with the exit of leveraged capital requires precaution against pullbacks

Based on the deconstruction and analysis of five bull markets from 2005 to 2021, A-share bull markets usually follow the four-stage evolution rule of

[3]:

Phase	Duration	Market Characteristics	Leading Sectors	Core Driving Force
Initiation Phase	Approximately 15%	Recovering sentiment, moderate volume expansion	Financial sectors such as securities brokers, banks	Loose policies + liquidity injection
Main Uptrend Phase	Approximately 45%	Simultaneous volume and price increase, capital rushing into the market	Technology growth (AI, semiconductors)	Industrial trends + performance verification
Diffusion Phase	Approximately 60%	Profit-making effect spreads, active themes	Consumption, new energy, cyclical stocks	Expectations of fundamental improvement
Termination Phase	Approximately 30%	Increased volatility, obvious divergence	Rotation of catch-up sectors	Overheated sentiment + valuation bubble

The current market (December 2025 - January 2026) is in the

, characterized by:

• Index breaks the psychological threshold of 4000 points
• Turnover stabilizes above 2 trillion yuan
• Orderly sector rotation, spreading hot spots

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The 2025 A-share sector growth ranking clearly reflects capital preferences[1]:

Ranking	Sector	Annual Growth Rate	Capital Flow Characteristics
1	Non-Ferrous Metals	94.73%	Risk aversion + inflation expectations + new energy demand
2	Communications	84.75%	AI computing power demand + 5G construction
3	Electronics	47.88%	Semiconductor domestic substitution + consumer electronics recovery
4	Composite	45.00%	Theme investment + restructuring expectations
5	Power Equipment	42.00%	New energy policy support
6	Machinery and Equipment	40.00%	Equipment upgrading + intelligent manufacturing

• Financial Sectors
  take the lead: Securities brokers, banks, and insurance benefit from increased market activity
• Policy-Driven Themes
  : Emerging industries aligned with national strategies attract capital attention
• Characteristics
  : Moderate turnover expansion, steady index climb

• Technology Sectors
  become the main line: Hard technology tracks such as AI, semiconductors, and robots
• New Energy Track
  maintains strength: New energy vehicles, photovoltaics, energy storage
• Characteristics
  : Significant turnover expansion, increasing number of daily limit stocks, improved risk appetite

• Consumption Sectors
  take over: Food and beverage, pharmaceuticals and medical care
• Cyclical Sectors
  catch up: Non-ferrous metals, chemicals, building materials
• Characteristics
  : Capital spills over to previously stagnant sectors, general stock rally

• Defensive Sectors
  are favored: High-dividend stocks, banks, public utilities
• Performance Realization
  becomes the main line: Focus on fundamental certainty
• Characteristics
  : Increased volatility, severe sector divergence

Among the 19 stocks with turnover exceeding 1 trillion yuan in 2025,

[1]:

Ranking	Stock	Annual Turnover (trillion yuan)	Sector
1	Zhongji Innolight	2.51	Optical Modules/CPO
2	Oriental Fortune	-	Internet Finance
3	Xinyisheng	-	Optical Modules
4	Cambricon-U	-	AI Chips
5	CATL	-	New Energy Batteries

This data fully indicates that

, which is highly consistent with industrial trends and policy orientations.

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1. Unabated Policy Support
   : Dual driving force of “moderately loose monetary policy + new productive forces policy”
2. Continuous Improvement in Capital Liquidity
   : Insurance “New Year Kick-off”, public fund deployment, active margin trading and securities lending
3. Fundamental Support
   : GDP growth rate stabilizes at around 5%, consumption contribution rate rebounds to 65%
4. Clear Industrial Trends
   : AI commercialization implementation, humanoid robot mass production, new energy penetration rate exceeds 51%

Risk Type	Specific Performance	Response Strategy
Policy Risk	Unexpected interest rate hikes by the Federal Reserve, tightened domestic real estate policies	Monitor marginal changes in policies
Market Risk	Excessively fast growth of margin trading and securities lending balance, large-scale outflow of northbound capital	Monitor leveraged capital sentiment
Industrial Risk	AI technology iteration falls short of expectations, overcapacity in new energy	Focus on the performance certainty of leading companies
Technical Risk	Excessive short-term growth, excessively high deviation rate	Moderately control positions

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• Securities Broker Sector
  : Benefits from increased market trading volume
• AI Computing Power
  : Computing power chips, edge computing, CPO optical modules
• Semiconductors
  : Equipment and design companies under the domestic substitution logic

• Consumption Upgrade
  : Food and beverage, pharmaceuticals and medical care
• New Energy
  : Energy storage, offshore wind power, hydrogen energy
• High-End Manufacturing
  : Industrial mother machines, robots

• Cyclical Stocks Catch-Up
  : Non-ferrous metals, chemicals
• Defensive Assets
  : High-dividend stocks, banks, public utilities
• Technological Innovation
  : Continuously focus on AI application implementation

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The turnover of Shanghai and Shenzhen Stock Markets exceeding one trillion yuan is an important signal of increased market activity, but investors need to

:

1. Characteristics of Healthy Volume Expansion
   : Turnover expansion is accompanied by index increases, orderly sector rotation, and increasing number of daily limit stocks
2. Characteristics of Overheating Signals
   : Sharp turnover expansion but stagnant index, imbalance between gaining and losing stocks, net outflow of northbound capital

From the current market situation,

; these data all indicate that the market is in a , and the subsequent market trend is expected to continue to deepen[2]. However, investors still need to pay attention to short-term technical pullback pressure and maintain a rational investment mindset.

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[1] Securities Times - “2025 Financial Year-End Review Part 3: A-Share Market Repeatedly Breaks Records in 2025”, January 7, 2026
[2] China Economic Net - “Shanghai Composite Index Records 13 Consecutive Positive Closes to Hit 10-Year High; Full-Market Turnover Exceeds 2.8 Trillion Yuan”, January 7, 2026
[3] 21st Century Business Herald - “After Analyzing the Rotation Rules of 5 A-Share Bull Markets, I Found That Doubling Returns in a Bull Market Is Not Difficult!”, July 17, 2025