A-Share Market Hits 3-Trillion-Yuan Turnover for Seven Consecutive Days: Analyzing Endogenous Momentum and Structural Divergence

Seven Consecutive Trading Days of Turnover Exceeding RMB 3 Trillion: Endogenous Momentum Emerges; Structural Divergence Is Key to Sustainability

The Shanghai, Shenzhen, and Beijing Stock Exchanges have collectively recorded daily trading volumes exceeding RMB 3 trillion for seven consecutive trading days—an increase of over RMB 100 billion compared with the same period on the previous trading day. This figure not only sets a new weekly volume high for 2024 but also ranks among the top levels observed in A-share market history over the past five years. While the market widely interprets this surge as a visible signal of “restored investor confidence,” beneath the surface, the composition of capital flows, underlying drivers, and policy alignment are quietly reshaping the nature of the rally. Linear extrapolation—e.g., “higher volume = bull market”—has grown increasingly inadequate. What truly determines whether this surge in turnover can evolve from a “pulse-like expansion” into a “trend-sustaining foundation” is the origin, allocation logic, and industrial anchoring of incremental capital.

Capital Structure: Modest Northbound Return; Margin Financing and Domestic Institutional Funds Drive the Rally

Data reveals that northbound funds exhibited a “slow-in, fast-out” pattern in early May: net inflows totaled approximately RMB 8.6 billion for the week, yet daily volatility widened markedly to ±RMB 3.5 billion—significantly above April’s average of ±RMB 1.8 billion. Concurrently, concentration in northbound holdings intensified: the top ten positions now account for 42.3% of total northbound equity holdings, underscoring strengthened preference for “core assets” rather than broad-based buying.

In sharp contrast, margin financing and securities lending (margin trading) balances continued their upward trajectory. As of May 13, the total margin balance reached RMB 1.68 trillion—up 5.2% from the end of April. Notably, financing purchases on the STAR Market and ChiNext accounted for 61% of total margin activity, indicating that newly leveraged capital is disproportionately favoring growth-oriented sectors.

Even more noteworthy is the evolving behavior of domestic institutional investors. In April, newly issued equity-focused funds raised RMB 124.7 billion—the highest monthly total since September 2023. Meanwhile, equity allocation ratios for securities asset management firms and insurance companies rose by 0.8 and 0.5 percentage points, respectively, month-on-month. Critically, the pace at which these newly launched funds built positions displayed a “fast-in, fast-out” characteristic: the average position size for the first batch of established funds climbed to 72% within just 15 trading days—far outpacing the historical average (65% achieved only after 45 days). This suggests institutions are not passively waiting—but actively executing tactical allocations based on dual confirmations of both a “policy bottom” and a “valuation bottom.”

Policy Catalysts: From “Floor Support” to “Activation”; Institutional Dividends Enter Implementation Phase

This volume expansion is no isolated phenomenon—it reflects the synchronized implementation of multiple pivotal policies. First, detailed implementation rules under the “New Nine National Guidelines” are being rolled out rapidly. Starting in May, the China Securities Regulatory Commission (CSRC) released draft revisions to the Administrative Measures for Material Asset Restructuring of Listed Companies, proposing a “green channel” for mergers and acquisitions involving technology enterprises aligned with national strategic priorities. Review timelines for such deals will be compressed to within 20 working days. Simultaneously, new dividend oversight regulations require companies with dividend payout ratios below 30% for three consecutive years to disclose special explanations—enhancing the certainty of cash returns for blue-chip stocks while pressuring low-efficiency assets toward consolidation or exit via M&A.

Second, foundational capital market reforms are yielding tangible results. On May 10, the Beijing Stock Exchange launched a direct linkage review channel for “specialized, sophisticated, distinctive, and innovative” (Specialized & Innovative) enterprises. For the first batch of 12 applicants, average acceptance time shortened to just 3.2 working days. Meanwhile, the Shanghai and Shenzhen Stock Exchanges jointly expanded the scope of securities available for securities lending under the stock-lending program; all over 400 STAR Market stocks are now eligible. The systematic reduction in institutional friction costs has directly enhanced portfolio rebalancing efficiency and arbitrage opportunities—constituting fundamental infrastructure supporting volume expansion.

Industrial Anchors: Accelerated AI Industrialization Fuels Genuine Earnings Expectations

The ultimate test of volume sustainability lies in robust industrial fundamentals. Currently, AI is rapidly transitioning from a technological concept to commercial realization—and becoming the core magnet attracting long-term capital. Foxconn’s latest financial report confirms this trend: its Q1 2024 net profit reached NT$49.92 billion (approx. RMB 11.2 billion), exceeding market expectations by 3.1%. Its AI server order backlog extends through Q2 2025, with clients including NVIDIA, Microsoft, and Meta. Supply-chain data corroborates this momentum: AI-related chip shipments by Taiwan’s IC design firms surged 37% month-on-month in April—the highest single-month growth in three years.

Domestically, Alibaba Cloud’s explosive growth in Token revenue carries even greater signaling weight. As of May 13, its average daily Token revenue had increased over 500% since early April, reaching a monthly scale of several hundred million RMB. Crucially, Token consumption directly reflects AI model invocation frequency and commercial API call volume—serving as a harder, more objective benchmark of commercial progress than user counts alone. When cloud computing giants designate Token revenue as a core operating metric beyond 2026, it signals AI’s definitive shift—from a “cost center” to a “profit center.” Such genuine cash-flow expectations are driving capital away from thematic speculation and toward deep, value-driven exploration across the AI supply chain: trading volumes in semiconductor equipment, optical modules, and computing-power leasing rose over 40% in the first half of May—well above the market-wide average.

Sustainability Assessment: Domestic Allocation-Driven Capital Dominates; Probability of Bottom Confirmation Rises

Comprehensive analysis indicates a relatively high degree of sustainability underpinning the current volume expansion. Its core rationale is a structural shift in the composition of incremental capital—from the “leverage-driven” model dominated by retail margin traders in 2023, to today’s “allocation-driven” model led by domestic public funds, insurance companies, and professional margin traders. These participants feature longer holding periods, broader sector coverage, and stricter risk-control frameworks—making them far more conducive to healthy cross-sector rotation and valuation recovery cycles. According to CITIC Securities’ strategy team, if domestic institutional fund positions remain stable within the 75–80% range—and northbound inflows continue at a modest pace—A-share average daily turnover is likely to stabilize between RMB 2.8 trillion and RMB 3.2 trillion over the next three to six months.

That said, risks remain: first, the U.S. Federal Reserve’s June monetary policy meeting may trigger short-term foreign capital volatility; second, valuations for certain theme-based stocks have already reached the 90th percentile or higher historically, warranting caution against near-term profit-taking. Nevertheless, the triple convergence of policy support, capital flows, and industrial progress is propelling the market from “sentiment recovery” toward “value re-rating.” When trading volume ceases to rely on singular catalysts—and instead becomes the natural reflection of industrial upgrading and institutional reform—the so-called “market bottom” transforms from a static technical level into a dynamic historical coordinate: marking the emergence of new economic drivers and the redefinition of capital markets’ functional role.