The A-share market has witnessed a remarkable surge in activity since September 24, driven primarily by ample liquidity and a continuous influx of capitalThis rally has resulted in significant trading volumes, setting multiple records reflective of increasing investor interestData reveals that as of December 9, nearly 500 billion yuan has been added to the margin financing balance in the A-share market since that date, in addition to approximately 220 billion yuan in net inflows to stock-based ETFs and over 240 billion yuan in repurchases.

Analysts attribute this robust activity to favorable policies and an optimistic outlook for economic recovery, which are expected to accelerate the inflow of new funds into the A-share market.

This influx has primarily stemmed from margin funding and ETF investmentsThe period from September 24 to December 10 saw an unprecedented 50 consecutive trading days with daily turnover exceeding one trillion yuan

According to Wind data, indices such as the Shanghai Composite, Shenzhen Component, and ChiNext have experienced substantial gains, rising by 24.51%, 33.76%, and 47.93%, respectivelyAll first-level industries under the Shenwan classification have seen an upswing, particularly in the fields of computer science, commerce, retail, and comprehensive services, with increases of 63.22%, 56.62%, and 53.82%.

The significant market gains and trading volumes can be largely attributed to the influx of new fundsMargin financing has surged, with the balance reaching a historic high of 18,567.21 billion yuanSpecifically, since September 24, there has been a notable increase of approximately 4.96 billion yuan in margin financing, including an increase of over 2.68 billion yuan in October and 1.35 billion yuan in November alone.

On the industry front, all 31 first-level industries listed on Shenwan have experienced growth in their margin balances

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The electronic sector leads the charge with an increase of 819.68 billion yuan, followed by non-banking financials at 608.07 billion yuan, and computing technology at 552.35 billion yuanAdditionally, sectors such as machinery, electrical equipment, automotive, pharmaceuticals, and defense have also shown increases exceeding 200 billion yuan.

Examining individual stocks reveals that since September 24, 56 names have seen net purchases exceeding 1 billion yuan in margin fundingLeading this list are Eastern Fortune and SMIC, with net inflows of 183.34 billion and 58.04 billion yuan, respectivelyIn contrast, companies like Hikvision and Kweichow Moutai experienced significant net selling, indicating a complex investment landscape.

Li Qiusuo, the chief domestic strategy analyst at CICC, emphasizes that the influx of new capital is a crucial driver behind the current uptrend of the A-share market

He notes a marked rise in new investor accounts and margin balances, suggesting the market is witnessing its most vibrant phase since 2015, as evidenced by both trading volumes and turnover rates.

Moreover, ETFs have emerged as a significant contributor to this capital influxSince September 24, stock-based ETFs have recorded a net inflow of approximately 220.8 billion yuanHigh-performing products in this class include the Cathay CSI A500 ETF, which alone accumulated over 250 billion yuan in net inflowsOther ETFs like the Harvest CSI Star Chip ETF and Southern CSI A500 ETF have also seen substantial contributions.

Zhang Xia, the chief strategy analyst at China Merchants Securities, attributes this growth to the rapid increase in ETF penetration through banking channels, effectively funneling new capital into equity markets.

In addition to institutional inflows, corporations have proactively engaged in stock repurchase programs since September 24. Data indicates that 771 listed companies have initiated buybacks totaling around 240.91 billion yuan

Notably, companies like Fangda Carbon New Material, WuXi AppTec, and Sinopec have made significant repurchases, contributing to bullish market sentiment.

A striking statistic lies in the fact that over 1,100 publicly traded companies have issued buyback-related announcements since September 24. This trend encompasses various firms, including Hikvision and Newland, which have engaged in canceling buyback sharesAdditionally, several corporations have signed loan agreements with banks specifically to finance these repurchases or increase their shareholdings.

Qiu Xiang, co-chief strategy analyst at CITIC Securities, observes a proactive stance in this buyback trend, particularly in private enterprises, while traditional industries show higher amounts of borrowingForecasts suggest that the proposed 300 billion yuan funding initiative could potentially stimulate up to 460 billion yuan in repurchases or share purchases based on historical loan support ratios.

From a liquidity perspective, Deng Lijun, chief strategy analyst at Huajin Securities, posits that expectations for further loosening of monetary policy remain strong