There appears to be a potential upward trend in the market!

During today's early trading session, CATL (Contemporary Amperex Technology Co., Limited) marked a significant gain of 5%, leading various indices in a reboundThe recent announcement from Masdar, a global leader in renewable energy and sustainable urban development, has made headlines as they selected CATL as the primary supplier for its round-the-clock (RTC) battery energy storage systems in the UAE project.

Additionally, a critical indicator in the A-shares market underwent a notable shift last weekThe number of bullishly aligned stocks across the market reversed from a decline to an increase this past Friday

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Historical data suggests that when this indicator drops close to the 100 levels, it typically signals a market bottom, as was observed last ThursdayWhile overall index gains were modest on Friday, the number of bullishly aligned stocks surged by more than 20%. Such a trend usually signifies a forthcoming positive shift in the market.

Positive developments are on the horizon

On Monday morning, the market showed repeated signs of strengthLeading this trend was CATL, which saw its stock price rise by over 5%, propelling the ChiNext Index up by 2%. The catalyst for this movement stems from the significant positive news surrounding CATL.

Recently, Masdar announced CATL's successful selection as the primary battery storage system supplier for the UAE's RTC project, which stands to be the largest combined solar and battery energy storage project in the world.

The total investment in the project exceeds $6 billion and includes a battery storage capacity totaling 19 GWh as well as a 5.2 GW photovoltaic project

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Once completed, this will be the world's first all-weather large-scale power generation project, providing a continuous clean power output of 1 GW for 24 hours a dayThis clean energy will serve the world’s first AI + zero-carbon green data centerCATL has emphasized the importance of energy security as a crucial support for data security and will provide a Safe and durable Tianheng battery storage system in this collaboration.

Meanwhile, the performance of Chinese assets outside the A-shares market appears to be more robustThe Hang Seng Index opened with a 1.13% increase, reaching 19,804.64 points, with the Hang Seng Technology Index rising by 1.68%. Noteworthy gains included JD.com up 4%, Kuaishou nearly 3%, with Alibaba, Baidu, BYD Electronics, and Meituan also rising by over 2%. Subsequently, the Hang Seng Technology Index experienced an increase of over 2%. The A50 index also performed notably better than the Shanghai Composite.

This significant improvement in global markets has evidently stimulated bullish sentiment, which cascaded into the brokerage sector

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Major financial stocks saw a noticeable uptick, with companies like AVIC Capital and Huaxi Securities reaching their price limits, along with gains in other firms like Guosheng Financial Holdings,CMS, COFCO Capital, and Guotai Junan.

In insights from the weekend, following high-level calls between Chinese and American officials, traders aggressively purchased call options linked to Chinese stock index exchange-traded funds (ETFs). Chris Murphy, Co-Head of Derivatives Strategy at Susquehanna International Group, remarked that the call options for iShares China Large-Cap ETF give holders the right to buy approximately 4 million shares at prices ranging from $31 to $32 per share before next weekend, with options to purchase further shares in February.

A critical indicator makes a change

Indeed, last week brought notable changes in the A-shares market as well

• Rapid Decline of Risk-Free Interest Rates
• Policies to Reverse Low Prices
• Is Capital Flowing Back to Dividend Assets?
• U.S. CPI Approaches Short-Term Turning Point
• Insurers Boost Real Estate Holdings

Last Tuesday, A-shares saw a substantial volume increase but recorded a downturn in bullish alignment data that dayConsequently, the market's movements over the following two trading days were lacklusterHowever, Friday saw a slight upward trend, where it was noted that the data reflecting bullish alignment had its first reversal in recent weeksThis signals that the market is heading in a more favorable direction.

Furthermore, investors who engage in margin trading netted over 6.898 billion yuan in new purchases last week, ending a three-week streak of net selling.

From the viewpoint of foreign investors, while there has not been a significant influx recently, Cameron Brandt, Research Director at EPFR Global, indicated a renewed interest in emerging markets

However, the current focus remains more acute on the situation in the United States, causing a challenge to the narratives surrounding emerging marketsThe ongoing conversation surrounding reliable information has gained traction within primary emerging Asian markets, with considerable capital flowing into India, China, and South Korea markets.

Moreover, data from the Dragon and Tiger lists indicated that the enthusiasm from speculative investors declined over the past week, with a decrease of 65 instances of being notably active and a reduction of nearly 13.6 billion yuan in active amountsAnalysts suggest that this decline might correlate with shrinking transaction volumes and the approach of lengthy holidays.

A different trend emerges

Current conditions indicate another factor that might influence equity markets: developments within the bond market

Recent fluctuations in the bond market have been considerable, with sustained disparities between funding rates and treasury yieldsSimultaneously, there has been an increased regulatory focus on stabilizing exchange ratesSignificantly, the latest data revealed a recovery in the actual economic growth rate from the previous quarter's 4.6% to 5.4%, exceeding market expectations of 5%. This marks one of the fundamental reasons behind the heightened volatility in the bond market.

Should the bond market weaken, it might imply a more favorable economic outlook, potentially facilitating a bullish trajectory for equitiesAs for the portrayal of the bond market, Minsheng Securities expresses that the transition between bull and bear phases is often prolonged, with substantial adjustments to bond market conditions, typically accompanied by marginal shifts in the economic fundamentals and policy environment

An extended view indicates a clear trend of loose monetary policy, hinging crucially on the situation regarding financial credit and fundamental recoveries, with ongoing institutional pressure on investment positions.

In this context, the question arises: will the spring offensive for equity markets commence? Zhongtai Securities posits that the policy impacts are beginning to be recognized and priced in by certain capital playersFollowing the Spring Festival and the Two Sessions, the market could witness a clearer picture regarding the progression of real estate and local government projectsTherefore, akin to the dynamic between 2021 and now, the unfolding of policy expectations will be the key variable influencing the market’s movements from late January to March ahead of the Two Sessions