A-share market closing review | A-shares plunged on low trading volume, with the Shanghai Composite Index falling by 1.85%! Four major reasons exposed, pharmaceutical sector active against the market.

On July 16th, A-shares fell on low volume, with all three major indices collectively closing lower. Nearly 2500 stocks in the market saw gains, with a total turnover of 2.4 trillion RMB for the day, a decrease of 167.59 billion RMB from the previous trading day. By the closing bell, the Shanghai Composite Index fell by 1.85%, the Shenzhen Component Index fell by 1.97%, and the Growth Enterprise Index fell by 2.95%. The following four factors may have influenced the market today: 1. Sharp declines in the Japanese and South Korean stock markets exacerbated risk aversion sentiment in the Asia-Pacific market. The Nikkei 225 index fell by 3%, and the KOSPI index in South Korea fell by 7%. Heavyweight tech stocks such as Samsung Electronics and SK Hynix saw significant declines, which dampened the opening sentiment of A-shares. 2. Continuous adjustments in the overseas semiconductor sector have suppressed the growth direction of A-shares in technology. Concerns about AI investment returns, overvaluation of chip stocks, and the outlook for storage prices have increased. The volatility in overseas tech stocks has transmitted to A-shares in the semiconductor and computing hardware sectors. 3. Fluctuations in oil prices due to the repeated escalation of Middle East tensions have dampened global risk appetite. Rising oil prices have strengthened concerns about imported inflation and tightening monetary policies. Asian markets with high energy import dependence are under pressure, and A-shares have also been influenced by external sentiment. 4. A-shares have accumulated a lot of profits in popular sectors from the previous period, and funds are cashing in on these gains due to external market volatility. The semiconductor and AI sectors have recently experienced increased volatility at high levels, leading some funds to shift towards undervalued and defensive stocks, causing major indices to weaken collectively at the opening bell. In terms of the market, hotspots are quite scattered. The pharmaceutical sector was active against the trend, with Harbin Pharmaceutical Group seeing a 5-day streak, while Hainan Haiyao, Landfar Bio-medicine, Zhangzhou Pientzehuang Pharmaceutical, and HeiLongJiang ZBD Pharmaceutical all hit their limit up. The AI concept also saw a shake-up, with Genimous Technology on a 2-day streak, and several other stocks hit their limit up. The film and entertainment sector continued to show strength, with Ruyi Film Entertainment on a 2-day streak, and Shanghai Film hitting its limit up. The PCB concept also saw partial activity, with Ganzhou Yihao New Materials up 20CM. On the downside, the entire semiconductor industry chain experienced declines, with the semiconductor equipment sector continuing to weaken. Acter Technology Integration Group hit its limit down for the second consecutive day. The storage chip concept also underwent continued adjustment, with Shenzhen Techwinsemi Technology and GigaDevice Semiconductor Inc. both hitting their limit down. Looking ahead, Orient believes that from a technical perspective, the Shanghai Composite Index still has the momentum to rise, with the high point of this week likely around 3970 points. Hot sectors: 1. The film and entertainment sector saw another rise. 2. The consumer electronics sector saw gains. 3. The pharmaceutical sector was active. Institutional views: - Soochow: Fundamentals continue to disturb the market, and they recommend focusing on leading stocks with strong earnings certainty. - Orient: The Shanghai Composite Index still has the momentum to rise, with the high point of this week likely around 3970 points. - Founder: Continues to balance high volatility, with a focus on the independent logic of innovative pharmaceuticals. This article was originally published by Tencent, and edited by Jiang Yuanhua.