A-share midday review | Three major indices fell more than 1% in the first half of the day, grid equipment stocks surged against the trend, and the three major telecommunications operators collectively declined.

On February 2nd, the market experienced morning volatility adjustments, with all three major indexes falling by over 1% during trading hours. By the midday close, the Shanghai Composite Index was down 1.32%, the Shenzhen Component Index was down 1.41%, and the ChiNext Index was down 1.18%. The total turnover of the Shanghai and Shenzhen stock markets in the morning was 1.64 trillion yuan, a decrease of 290.4 billion yuan compared to the previous trading day. Across the board, 3,500 stocks in the market were in decline. In terms of hotspots, the electric grid equipment sector saw a surge, with stocks like Beijing SOJO Electric, San Bian Science&Technology, and Hangzhou Cable all hitting their daily limit up. Liquor stocks also saw gains, with Gansu Huangtai Wine-Marketing Industry hitting its limit up and Sichuan Swellfun rising over 7%. In the early trading session, the entertainment sector was strong, with Hengdian Entertainment hitting the daily limit up. The optical module concept saw repeated activity, with Tongding Interconnection Information hitting the limit up. The commercial aerospace sector was also active, with Western Metal Materials hitting the limit up. On the downside, as the international precious metals market experienced severe volatility, the A-share nonferrous metal sector saw a wave of limit-downs, with stocks like Baiyin Nonferrous Group and Hunan Silver among the thirty-plus stocks hitting the limit down. Oil and gas stocks were also down, with Shandong Molong Petroleum Machinery and Zhongman Petroleum And Natural Gas Group Corp.,Ltd. hitting the limit down. Pesticide and chemical stocks were oscillating downwards, with Xinjiang Zhongtai Chemical and Luxi Chemical Group hitting the limit down. The semiconductor industry chain was weakened, with Puya Semiconductor (Shanghai) Co., Ltd., Shenzhen Sunmoon Microelectronics Co., Ltd., and Wingtech Technology hitting the limit down. The three major telecommunications operators collectively fell, with China Mobile Limited and China Telecom Corporation falling by nearly 5%. Looking ahead, Galaxy Securities stated that sector rotation is expected to remain the main theme before the Spring Festival, focusing on structural opportunities within the rotation. CITIC SEC also stated that the comprehensive interpretation of the clues of rising prices from commodity heat to cyclical heat may run through the first quarter. Popular sectors: 1. The electric grid equipment sector saw a surge with multiple stocks hitting their limit up. 2. The precious metals sector saw a lot of limit-downs. 3. The liquor sector continued to be strong. 4. The optical module sector saw repeated activity. Institutional viewpoints: 1. Galaxy Securities: Sector rotation before the festival may still be the main theme. 2. Zheshang: Strategic long-term view, moderate structural adjustments. 3. CITIC SEC: From speculative to real, focus on the diffusion of clues of rising prices.