In-Depth Analysis of the Impact of 2026 'Stock-Bond Seesaw' Effect and RMB Appreciation on the A-Share Market

According to CITIC Construction Investment’s 2026 A-Share Capital Market Outlook and research from multiple institutions, the 2026 A-share market will present three core features: “Resonant Liquidity Easing, Stock-Bond Reallocation, and RMB Appreciation-Driven Growth”. The medium-term ‘stock-bond seesaw’ effect will further support the A-share market trend, and household “deposit shift” is expected to become the largest marginal incremental capital in the market[0][1].

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In 2026, macro liquidity presents two core features:

and [1]. Globally, the Federal Reserve is expected to maintain the pace of cutting interest rates by 50 basis points, resume balance sheet expansion in December 2025 to ease USD financing pressure, and coupled with cooling global inflation, central banks around the world can maintain loose policies. Domestically, monetary policy has shifted from “extraordinary counter-cyclical adjustment” to “strengthening counter-cyclical and cross-cyclical adjustment”.

CITIC Construction Investment points out that the USD is under pressure on the exchange rate front, and RMB appreciation will support the A-share market to strengthen[1]. Looking at the full-year performance of 2025, the RMB-USD exchange rate appreciated by more than 4%, hitting the largest annual increase in five years, and the Shanghai Composite Index rose 16.5% for the full year of 2025, marking the first time since 2017 that China’s stock market and RMB exchange rate strengthened simultaneously[2][3].

Institution	Forecast Level	Time Node
Huatai Securities	6.82	End of 2026
Most Institutions	7.0-7.2	Annual two-way fluctuation range

Industrial Securities’ macro research team analyzes that resonant domestic and external factors will drive the RMB to remain stable with an upward bias: resilient external demand and peak foreign exchange settlement are important drivers of recent RMB appreciation. From January to November 2025, cumulative exports grew 5.4% year-on-year, and the trade surplus continued to expand, providing sufficient liquidity support for the foreign exchange market[4].

RMB appreciation affects the A-share market through the following three paths:

1. Attract foreign capital inflow
   : USD-denominated asset returns increase, improving market risk sentiment
2. Lift valuation center
   : Enhanced attractiveness of RMB assets boosts valuation recovery
3. Improve corporate profits
   : Lower raw material import costs benefit industries with “external costs and domestic demand”

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Amid a prolonged low-interest rate environment, asset allocation logic is being reshaped. CITIC Construction Investment points out that

, the attractiveness of the equity market increases, “fixed income+” products continue to boom, and the medium-term ‘stock-bond seesaw’ effect may guide capital to flow into the equity market[1].

According to the Research and Development Department of Orient Jincheng, the net supply scale of interest rate bonds will reach

in 2026, about 1.4 trillion yuan higher than the actual net financing amount in 2025[5]. There is structural contraction on the demand side:

• Difficulties in institutional balance sheet expansion
• Declining stability of the liability side
• Adjustment of asset allocation amid low interest rates

From the market performance, the main contract of 30-year treasury bond futures fell 4 times in 5 trading days in the first week of 2026, and once dropped to 110.40 yuan intraday on January 7, hitting the lowest point since October 2024[5]. The 10-year treasury bond yield rose to 1.8950%, returning to the high point of September 24, 2025.

A-share capital net inflow: Sustained growth from Q3 → Q4 → 2026-Q1
Bond market capital net inflow: Gradual contraction trend
Capital migration trend: Obvious shift from bond market to equity market

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CITIC Construction Investment particularly points out that against the backdrop of a downward trend in broad interest rates, with a large number of time deposits maturing in 2026, the demand for household “deposit shift” and reallocation may become the

in the market[1].

Capital Source	Estimated Scale	Allocation Direction
Household Savings Deposits	~2.8 trillion yuan	Equity Assets
Wealth Management Fund Reallocation	~150 billion yuan	“Fixed Income+”, Multi-Strategy Products
Insurance Capital Increase	~80 billion yuan	Equity, Alternative Investments
Foreign Capital Return	~60 billion yuan	Core A-Share Assets
Margin Trading Increment	~50 billion yuan	Leveraged Capital

According to market data, over 45 billion yuan of public offering funds were in place in 2025, with trillions of yuan of capital on the way[6]. Sources of various institutional capital:

• Public offering funds
  : Expected to continue the warming trend of product issuance
• Insurance funds
  : Premium income continues to improve, and policies encourage increasing the proportion of equity allocation
• Private equity funds
  : Attract high-net-worth capital allocation supported by profit effects

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Against the background of RMB appreciation and stock-bond reallocation, the following directions are worthy of key attention:

Guosheng Securities recommends focusing on steel (sheet, special steel, long products), chemicals (refining and chemical, other petrochemicals), air transportation, industrial metals (lead, zinc), papermaking, and gas sectors[3].

Following the logic of capital flow, attention should be paid to valuation recovery driven by capital inflows, benefiting sectors including

[3].

• Fields with
  independent boom advantages + capacity cycle bottom reversal + overseas expansion resonance
• High-end manufacturing: Power equipment, machinery
• Technology growth: Computing power algorithms, chips, semiconductors, humanoid robots, solid-state batteries

According to the chart analysis, 2026 investment potential scores:

• High-end manufacturing
  : 95 points (highest)
• Technology growth
  : 92 points
• Consumption upgrade
  : 78 points
• Medical and healthcare
  : 75 points
• New energy
  : 70 points
• Financials and real estate
  : 65 points

Goldman Sachs predicts in its research report that driven by both corporate profit growth and valuation recovery, China’s stock market will see a steady bull market in 2026 and 2027, with an expected annual growth rate of

[2]. Key factors driving accelerated profit growth include:

• Widespread application of artificial intelligence (AI) technology
• Overseas expansion trend of Chinese enterprises
• “Anti-involution” policies to curb disorderly competition

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In 2026, the A-share market is expected to continue to see a large-scale net capital inflow, providing liquidity support for a sustained and stable trend market:

• Foreign capital: A stronger RMB helps attract the return of overseas capital, and northbound capital saw a net inflow of over 20 billion yuan in the last week of 2025[7]
• Public offering funds: Expected to continue the warming trend of product issuance
• Insurance funds: Premium income continues to improve, and policies encourage increasing the proportion of equity allocation

• The scale of margin trading has reached a relatively high level, and the pace of net inflow may slow down compared with 2025
• Shareholder share reduction has been strictly regulated across the board, and the market is transforming from “financing-oriented” to “balanced investment and financing”

The September 2024 Politburo meeting clearly stated that it will fully revitalize the economy, reverse the expectation of balance sheet deflation, and financial asset prices have become a key link. With the adjustment of the role of the real estate industry, the capital market has undertaken an important mission for household wealth allocation[1].

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1. Policy convergence risk
   : Economic stabilization and mild inflation recovery may push fiscal and monetary policies from “aggregate easing” to “structural optimization”
2. Bond market volatility risk
   : Reduction of stable capital from banks, insurance and other institutions may lead to increased bond market volatility
3. Exchange rate volatility risk
   : If the RMB experiences sharp rises or falls deviating from fundamentals, regulators may intervene

• Grasp the allocation window brought by the peak of maturing time deposits
• Focus on the timing of RRR cuts and interest rate cuts, and deploy duration-neutral strategies

• Shift from valuation recovery to profit-driven growth
• Focus on technology enterprises entering the performance verification stage in 2026
• Emphasize enterprises with core technological breakthroughs and order acquisition capabilities

• Core allocation
  : High-end manufacturing, technology growth (40%-50%)
• Satellite allocation
  : Consumption upgrade, medical and healthcare (20%-30%)
• Flexible allocation
  : Financials and real estate, new energy (15%-25%)

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Driven by the “stock-bond seesaw” effect and RMB appreciation, medium-term investment opportunities in the 2026 A-share market are worth looking forward to. The core logics are as follows:

1. Resonant liquidity easing
   : In the second half of the global interest rate cut cycle, the overall internal and external liquidity environment is favorable
2. Capital reallocation
   : Prolonged low interest rates reshape asset allocation, with capital migrating from the bond market to the stock market
3. RMB appreciation-driven
   : Attracts foreign capital inflow, lifts the valuation center, and improves corporate profits
4. Deposit shift effect
   : The transfer of household wealth to the equity market becomes the largest marginal increment

, it is recommended to focus on high-end manufacturing, technology growth and other fields with independent boom advantages and overseas expansion logic, and also seize the opportunities of RMB appreciation benefit industries with “external costs and domestic demand”. As the market shifts from valuation recovery to profit-driven growth, high-quality targets with real performance support will receive higher premiums.

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[0] CITIC Construction Investment 2026 A-Share Capital Market Outlook - Securities Times
https://www.stcn.com/article/detail/3593828.html

[1] CITIC Construction Investment: Medium-Term “Stock-Bond Seesaw” Effect Further Supports A-Share Trend - East Money
https://finance.eastmoney.com/a/202601153619660836.html

[2] 2026 Global Funds Bets Heavily on China’s Stock Market and RMB - Sina Finance
https://finance.sina.com.cn/stock/usstock/c/2026-01-14/doc-inhhhnwv7138068.shtml

[3] RMB Breaks 7, CSI 300 Hits 10-Year High: 2026 Market is Stable - Securities Market Weekly
https://cj.sina.cn/articles/view/1741543435/67cdd80b02701dx30

[4] Will the RMB Continue to Rise? Latest Institutional Judgments! - Securities Times
https://www.stcn.com/article/detail/3586657.html

[5] “Seesaw” Effect Emerges! Incremental Capital Inflow into Bond Market Slows Down - Securities Times
https://www.stcn.com/article/detail/3584999.html

[6] New Year Capital Enters the Market! Over 45 Billion Yuan of Public Offering Funds in Place - Broker China
https://www.ke.com/chanquan/202601111305

[7] In-Depth Analysis of the First Trading Day of A-Share Market in 2026 - UniFuncs
https://unifuncs.com/s/LbvuOWTo