The A-share market in 2025 is like a suspenseful drama, with ups and downs that captivate the audience. Since the beginning of the year, the market has exhibited a strong upward trend, and on August 18, it reached a historic highlight— the total market value of A-shares first broke through the 100 trillion yuan mark. The three major indices and the NEEQ 50 index all closed up collectively, with the Shanghai index successfully standing firm above 3700 points, and briefly breaking through the high of 3731.69 points reached in February 2021, setting a new high record in nearly a decade, showcasing the market's fervor!
At the same time, the global economic situation is changing rapidly, with major economies entering a cycle of interest rate cuts. In this broader context, domestic expectations for interest rate cuts are also becoming stronger, and a series of actions by the central bank have heightened market expectations for interest rate reductions. For example, on September 25, the central bank conducted a 300 billion yuan MLF operation, with the winning bid rate lowered by 30 basis points to 2.00%, which is undoubtedly like a stone thrown into a calm lake, creating a thousand ripples. Market expectations for further interest rate cuts instantly surged, with everyone eagerly hoping to capture new opportunities for market explosions in this wave of interest rate reductions. So the question arises: when the interest rate cut actually takes effect, especially after September, will the market really kick off a raging bull market like a runaway horse?
With strong policies in place, can they ignite the fire of a raging bull market?
From past experiences, policy plays a crucial role in the initiation and development of bull markets, serving as the 'strongest booster' behind them. Looking back at the magnificent bull market of 2014-2015, the implementation of a series of accommodative monetary policies such as reserve requirement ratio cuts and interest rate reductions acted like a timely rain, injecting continuous liquidity into the market, becoming the direct trigger for the bull market's explosion. A large amount of capital surged into the capital market like a rushing tide, driving stock indices to soar, creating an unforgettable wealth myth.
As we move into 2025, the current policy environment is also filled with imaginative possibilities. On September 24, the State Council held a major press conference on financial support for high-quality economic development, where key figures like central bank governor Pan Gongsheng, head of the National Financial Regulatory Administration Li Yunze, and chairman of the China Securities Regulatory Commission Wu Qing expressed their views. A series of policy combinations were launched forcefully, instantly igniting the market's nerves. Subsequently, the central bank decisively lowered the reserve requirement ratio by 0.5 percentage points, further releasing massive liquidity. Additionally, the China Securities Regulatory Commission and other relevant departments formulated guidelines (on promoting the entry of medium and long-term funds into the market), providing strong support for the introduction of stable long-term funds into the market. The intensive rollout of these policy measures undoubtedly gave the market a 'booster shot,' filling investors with confidence about the future market.
However, while the policies are strong, triggering a raging bull market is not an easy task. The transmission of policies requires time; there is a certain lag between policy implementation and the market's actual response. Moreover, the effectiveness of policy implementation is also constrained by various factors, such as the actual conditions of the economic fundamentals and the level of confidence restoration among market investors. Although the current policy environment is favorable, whether the market can enter a raging bull market post-September still needs to be observed regarding how these policies continue to exert influence and how the market digests and responds to these policies.
Funds are flowing in the dark; can they gather into a colossal wave for the bull market?
Funds are undoubtedly the 'blood' that sustains the bull market. When a large amount of capital continuously flows into the market, it adds fuel to the raging fire of the bull market, pushing stock indices to continually rise. Since 2025, there have been some notable new changes in the flow of capital in the market. The financial statistics report for July showed that the trend of 'moving' deposits in China has become increasingly evident, with household deposits decreasing by 1.11 trillion yuan in a single month, while deposits in non-banking financial institutions surged by 2.14 trillion yuan. This data change indicates that against the backdrop of continuously declining deposit rates and rising attractiveness of equity assets, more and more funds are shifting from the 'safe haven' of bank deposits to higher-yielding areas such as insurance, funds, and stocks, bringing valuable incremental capital to the stock market.
At the same time, the balance of margin financing continues to grow, successfully returning to the 2 trillion yuan mark, igniting investors' enthusiasm, significantly warming market risk appetite, and the profit-making effect spreads like a virus, attracting more funds to rush in. In addition, foreign capital has begun to reassess the investment value of Chinese assets, showing signs of returning, injecting new vitality into the market. However, the flow of funds is not without obstacles and uncertainties. The complex and changing global economic situation may lead to fluctuations in the pace of foreign capital inflow; some structural problems in the domestic market may also affect the effective allocation of funds. Therefore, even though the current capital situation shows positive trends, to gather into a colossal wave driving the raging bull market, further cooperation among various conditions is still needed.
The economy knows whether it is warm or cold; can it support the continuous surge of a bull market?
The economic fundamentals are always the cornerstone of stock market development. Only when the real economy is prosperous and stable, and corporate profits continue to grow, can the stock market have solid support, enabling the bull market to go further and more steadily. From the data of the first half of 2025, China's GDP growth rate reached 5.3%, higher than the initial target growth rate of around 5%, which is undoubtedly encouraging news, demonstrating the strong resilience and vitality of our economy.
In terms of industry, technology stocks performed particularly well, with the Sci-Tech Innovation Board index rising by as much as 22% this year, significantly outpacing broad indices like the CSI 300 and SSE 50. With strong policy support and significant breakthroughs in technology, more than 80% of the new generation information technology and biomedicine companies on the Sci-Tech Innovation Board have become the core driving force behind this round of tech stock gains. However, we cannot overlook some challenges faced during economic development. For instance, some traditional industries still face issues such as overcapacity and significant pressures for transformation and upgrading; the recovery of the consumer market has yet to reach the expected strength, and its impact on economic growth still needs to be enhanced. Therefore, although the economic fundamentals are overall improving, sustaining a raging bull market will still require continuous efforts in structural adjustments and consumption boosts to address deep-seated issues in economic development.
Can historical experience accurately predict the direction of the bull market?
History, like a mirror, often provides us with valuable references. Looking back at several rounds of bull markets in A-shares, such as in 2005-2007, 2014-2015, and 2019-2021, each had its unique historical background and market characteristics during their initiation and development processes. From a timeline perspective, the past four bull markets were often closely related to the alternation of five-year plans. In the final year of one five-year plan and the starting year of the next, significant market movements are likely to occur. According to this pattern, the years 2025-2026 are critical periods for the conclusion of the '14th Five-Year Plan' and the beginning of the '15th Five-Year Plan,' seemingly providing a certain time window for the main upward wave of the bull market.
From the perspective of market space, in the past three major bull markets, the peaks of the CSI 300 were all around 5500 points, while the current CSI 300 is still quite far from this level, theoretically indicating significant upward potential. However, history is only a reference; each bull market has its unique economic, policy, and market environments, and one cannot simply replicate past experiences to predict the future. The market in 2025, under the influence of accelerating technological revolutions and deep adjustments in the global economic landscape, may exhibit more complex and variable trends, making it difficult to predict with past experiences.
In summary, while expectations for interest rate cuts continue to rise, favorable policies are frequently emerging, and the capital situation is showing positive changes, the overall economic fundamentals are improving, and historical experiences seem to provide some support for the bull market, it is still too early to assert that the market will enter a raging bull market after September. The market's movements are influenced by a variety of factors that intertwine and interact, full of uncertainty. For investors, while paying attention to market dynamics and seizing investment opportunities, it is equally important to maintain rationality and caution, manage risks effectively, and avoid blindly following trends. After all, in the ever-changing capital market, only rationality and caution can help find a tranquil harbor amidst the turbulent sea of stocks.
