[CITIC Securities Onshore + Offshore Strategy Weekly] Market at Bottom Zone, Style Gradually Balancing

English summary

A-share market: The second oil shock does not change the August recovery trend. This Middle East oil shock is not a simple repeat of the first, but a second shock after systematic depletion of inventory and demand buffers; [higher risk of sustained oil price increases]. Middle East situation is unpredictable; short-term risk appetite reduction is still needed, and the most crowded trade has shifted from industrial cyclical stocks to tech stocks. High oil prices and high interest rates suppress valuations more than prosperity differences; position crowding is key. Sentiment indicators have hit freezing point, [private fund positions fell below 70%, the lowest since the "9.24 rally"], stock prices have fully reflected negative narratives, and subsequent position rebuilding will drive a significant index rebound and sector rotation recovery. Overall direction tends toward [style balance]; focus on nonferrous metals, dividends, innovative drugs that institutions reduced in Q2, as well as lithium batteries, energy chemicals with earnings beats but valuation cuts. ...