A-Share Mid-Day Review | Three Major Indices Trended Differently, Shanghai Composite Up 0.52%, Banking and Cyclical Resources Sector Led the Way
July 30th, A-share market trended differently, with more than 3100 stocks plummeting, and by mid-day, the Shanghai Composite rose 0.52%, while the Shenzhen Component Index fell 0.06%, and the ChiNext Index fell 0.71%.
Jinrong Securities believes that August may continue to see a strong trend in A-shares, with the slow bull market trend remaining unchanged. In August, cyclical and technological growth sectors may have a relative advantage. It is recommended to buy low: one is to benefit from the anti-rollover policy and improved profit expectations in industries such as electric new materials, colored metals, express delivery, chemicals, big finance, etc.; two is to take advantage of the trend towards policy and industry support in AI applications, electronics (consumer electronics, semiconductors), media (AI applications, games), communications (computing power), military, robots, innovative pharmaceuticals, etc.
On the trading floor, hot sectors included banking, insurance, and big finance, with China Ping An reaching a new high in its intraday trading; cyclical resources sector such as steel, oil, coal, and precious metals rebounded strongly, with Xining Special Steel making two consecutive gains; media and entertainment sectors rose sharply, with many stocks hitting the daily limit, including Haoyuan Blue Ocean and other companies; innovative pharmaceuticals continued to heat up, with Daxin Pharmaceutical achieving an 8-day, 5-day gain; consumer staples sector remained lively, with white wine, travel, and other directions leading the way; besides these sectors, semiconductor, logistics, port, and military industries also saw some performance during the intraday trading. The decline was mainly seen in algorithmic hardware, solid-state batteries, stable coins, etc., as well as engineering machinery and automotive industry chains, with a higher-than-average decline rate.
Looking ahead to the market's future prospects, Eastern Securities believes that, considering various factors, the current market trend is still driven by liquidity and economic expectations, and there are still upside possibilities. The message conveyed by this round of market movements is that the market has not yet reached its peak.
Hot Sectors
1, Media Sector Rises Sharply
The media sector saw a sharp rebound, with Haoyuan Blue Ocean rising 20% to reach its daily limit, and other companies such as Jin Yi Film and Television, Ciwen Media, Beijing Culture, Guangming Media, and Shanghai Film also rose sharply.
Comment: As of July 29th at 3pm, the total box office for the summer season had exceeded 55 billion yuan, with a particularly strong performance from "Nanjing Photography Studio". Huaying Securities notes that the summer season is the longest period for film releases, and high-quality films are expected to drive steady growth in the film industry. As key movies continue to be released, the film industry market is likely to warm up, with attention focused on producers, distributors, and cinema operators' performance.
2, Pharmaceutical Sector Remains Hot
CRO, pharmaceuticals, and innovative pharmaceuticals remained hot, with Daxin Pharmaceutical achieving an 8-day, 5-day gain, and many other companies such as Nanxin Pharmaceuticals, Dongcheng Pharmaceuticals, and Guobang Pharmaceuticals also rose sharply.
Comment: Recently, the National Medical Insurance Administration hosted a meeting on supporting innovative pharmaceuticals. Nationgold Securities notes that since the beginning of 2025, the number and quality of new drugs approved for listing in China have continued to improve, and the commercialization of innovative pharmaceuticals in China has accelerated, with international leading new drug imports into China also picking up pace. After years of low growth, the innovative pharmaceutical sector is now at a value trough.
Institutional Views
1, Jinrong Securities: A-shares may continue to see strong trend in August, slow bull market trend remaining unchanged
Jinrong Securities believes that August may continue to see a strong trend in A-shares, with the slow bull market trend remaining unchanged. In August, cyclical and technological growth sectors may have a relative advantage. It is recommended to buy low: one is to benefit from the anti-rollover policy and improved profit expectations in industries such as electric new materials, colored metals, express delivery, chemicals, big finance, etc.; two is to take advantage of the trend towards policy and industry support in AI applications, electronics (consumer electronics, semiconductors), media (AI applications, games), communications (computing power), military, robots, innovative pharmaceuticals, etc.
2, Zhongtai Securities: Tech stocks may see structural benefits
Zhongtai Securities believes that from now to October, interactions and official announcements at various levels between China and the US are expected to be marked by "relaxation" and "constructive" tones, with a relatively low risk of conflict escalation. Considering various factors, the current market trend is still driven by liquidity and economic expectations, and there are still upside possibilities. In asset allocation, it is recommended to continue executing the "barbell strategy": focusing on tech + military sectors and non-bank financial assets outside the system.
3, Eastern Securities: Market still has upside potential, with science and technology as the main trend
Eastern Securities believes that considering various factors, the current market trend is still driven by liquidity and economic expectations, and there are still upside possibilities; transactional funds are still actively rotating between different sectors, maintaining a relatively good cyclical rotation, and the market remains in an upward running zone. In sector allocation, science and technology remains the main trend, with non-bank financials and innovative pharmaceuticals still having clear mid-term opportunities.