SSE Composite Index

The SSE Composite Index has shown a sustained rally, closing near the 3,000-point mark with a seventh consecutive day of gains, driven by policy support and inflows from long-term investors. The China Securities Regulatory Commission (CSRC) has taken measures to boost market confidence, including suspending new securities lending and encouraging mergers, acquisitions, and restructurings. These policy initiatives, combined with expectations of further reforms, are likely to continue supporting the market in the near term. Additionally, U.S. asset managers are positioning for a Chinese market recovery, viewing it as a 'once-in-a-lifetime opportunity' to acquire Chinese equities at historically low valuations. While there are no specific high-impact events scheduled in the next seven days, the prevailing positive sentiment and policy tailwinds suggest a higher probability of continued upward movement, albeit with potential for short-term volatility. The HIGH scenario aligns with the current market dynamics and policy environment, making a LONG position bias the most appropriate for the next week.

The decisive structural feature of this contract is calendar mechanics, not direction. The SSE official holiday notice of 2026-09-15 closed the exchange 25-27 September (Mid-Autumn) and closes it again 1-7 October (National Day), resuming 8 October. The resolution window therefore contains only three trading sessions - Monday 28, Tuesday 29 and Wednesday 30 September - and is measured from the 28 September open to the 30 September close, so roughly 2.5 sessions of variance with the Monday gap excluded from the measurement. Given September realised volatility (daily changes of +0.97%, +0.06%, -0.39%, -1.22% on 21-24 September), the standard deviation of the measured return is on the order of 1.3-1.5%, which places a majority of the distribution inside the -1.00%/+1.00% band before any view on direction. The structural regime reinforces that: the index has been range-bound since the 14 May 2026 peak of 4258.86, with a 52-week band of 3741.11-4258.86, and the launch baseline of 3888.3738 (the 24 September close) sits in the lower half of that band on turnover that had thinned to about 1.65 trillion yuan with margin balances drifting down from roughly 2.667 trillion yuan on 1 September to 2.638 trillion on 18 September. Sell-side consensus published 21 and 27 September (CITIC, Guosen, Zheshang, Fangzheng) explicitly frames the year as a range market with a stepwise structural rebound and sees no large pre-holiday correction risk. The dominant unresolved tension is domestic support versus an imported inflation-and-rates shock. On the supportive side: industrial profits grew 17.6% year on year in January-July 2026, August manufacturing PMI improved to 49.8 with new orders at 50.6, the yuan has appreciated through 6.70 to its strongest since January 2023 on a record 805.5 billion dollar eight-month trade surplus (preserving PBoC easing room while the LPR has stood at 3.00%/3.50% for sixteen months), and the PBoC pre-committed on 23 September to daily overnight reverse repos from 28 September to 8 October with the cap raised to 1 trillion yuan from 600 billion in prior rounds, directly neutralising holiday cash drain. On the restraining side: the Iran war and Strait of Hormuz closure have produced an oil-led inflation shock with Brent near 104 dollars, the US 10-year Treasury yield at about 5.18% (highest since 2007) and the 30-year above 5.5% (highest since 2004), the Fed having hiked on 16 September with roughly 67-70% odds priced for another October hike, and the Trump-Xi Washington summit of 23-25 September delivering only a two-month truce extension to 10 January rather than substantive tariff relief. In the last 24 hours the A-share market was closed and no domestic policy change occurred, but three verified marginal items emerged: Trump publicly rejected Iran's seven-day Hormuz reopening plan on Saturday 26 September and repeated the rejection on Sunday 27 September while saying talks should resume in the coming week (two-sided, partially unwinding Friday's oil relief); USTR Greer said on Friday 25 September that Washington will publish fuller details of the China negotiation outcome on Monday 28 September, framed as a compliance-verification period covering soybean and rare-earth commitments (a concrete in-window catalyst with two-sided risk and process-oriented framing that caps the upside); and US equities closed higher on Friday 25 September, which lowers the odds of a heavy Monday gap. None of these reverses the range-bound mainline; together they raise intraweek volatility without establishing directional drift. Because the measurement starts at the 28 September open, any bad-news gap is stripped out of the result, which asymmetrically trims the downside tail relative to a close-to-close construction. Layering the documented pre-holiday pattern (2017-2025: the third-to-last session before National Day rose only about 25% of the time averaging -0.68%, while the final two sessions rose about 62% of the time) on top of a near-zero drift produces a distribution centred close to flat. I therefore expect the 28 September open to 30 September close return to land inside the plus or minus 1.00% band and favour a neutral position bias for the week.

A-share trading in the next seven days is compressed to just three sessions (Sep 28-30) before the Oct 1-7 National Day holiday, so the contract's ending close is the Sep 30 close. The regime is a policy-supported intermediate rebound (brokers and fund houses reiterate confidence in A-share resilience), but pre-holiday liquidity is thin and profit-taking is rising after a broad Sep 25 decline. The dominant tension is policy/trade de-escalation support versus pre-holiday de-risking. The latest 24 hours brought a marginal, modest change: the Xi-Trump summit concluded with a tariff-pause extension but no major breakthrough, a mildly positive but already partly anticipated outcome. With only three low-liquidity sessions and the positive catalyst likely already reflected in the Sep 28 open, the open-to-close move most plausibly stays within +/-1%.

The SSE Composite Index will only have three trading days before the National Day holiday, and stock connect channels will suspend trading during the holiday period. The dominant market tension is PBOC liquidity support offsetting investors' pre-holiday risk reduction demand. The base case is neutral: September PMI is expected near the 50 boom-bust threshold, limiting large gains or losses, so seven-day return will likely stay within -1.00% to +1.00%.