A shares midday review | Three negative factors disturbing! Shanghai index approaching 3800 points, Shuangchuang index plunges more than 4%, multiple broad-based ETFs trading heavily

On July 17th, A-shares fluctuated downward, with the three major indices closing lower in the morning session, with over 4300 stocks in the red. The trading volume was 160 million in the first half of the day, compared to 1219.4 billion on the previous trading day. By midday, the Shanghai Composite Index fell 1.64%, the Shenzhen Component Index fell 3.7%, and the ChiNext Index fell 4.71%. Market analysis believes that the following three factors have a significant impact on the market today: 1. Weakness in overseas technology stocks overnight has disrupted sentiment in the A-share technology sector. The Nasdaq fell, with semiconductor and AI-related stocks falling, suppressing risk appetite for domestic electronics, communications, and computing power. 2. Previous hot technology sectors were crowded with trading, and profit-taking pressures are still being released. Recently, semiconductor, storage, and advanced packaging sectors have been continuously adjusting at high levels, and market funds are switching from high-end themes to low-end and defensive sectors. 3. After continuous adjustments, market confidence is cautious, and there is a lack of short-term funding. The previous trading day saw the Shanghai Composite Index fall below 3900 points, the ChiNext Index fell by nearly 3%, the Science and Technology 50 Index fell by over 4%, and the weak momentum had an impact on today's market. At the same time, market volume has shrunk, and the play of existing funds has intensified. The trading volume of A-shares on the previous trading day dropped to about 2.4 trillion yuan, indicating a lack of willingness for incremental funds to enter the market, making it easy to amplify sector rotation and index volatility. It is worth noting that at the time of the sharp decline, several broad-based ETFs saw significant trading volume during the day, with the ChiNext ETF Yifangda (159915.SZ) trading over 7.8 billion, exceeding yesterday's full-day trading volume. The trading volumes of the Science and Technology 50 ETF Huaxia (588000.SH), the CSI 300 ETF Huatai Pere (510300.SH), the CSI 1000 ETF Southern (512100.SH), the A500 ETF Huatai Perrin (563360.SH), and the A500 ETF Southern (159352.SZ) all exceeded 3 billion, approaching yesterday's full-day levels. In the market, the power sector is moving against the trend, with Guangxi Guiguan Electric Power, Shenzhen Nanshan Power, Leshan Electric Power, and DaTang HuaYin Electric Power all hitting the limit up. The large financial sector saw a surge during trading hours, with Xiangcai Co., Ltd. hitting the limit up straight. The end-side hardware concept is active, with Zhejiang Meorient Commerce & Exhibition Inc. up by the limit. On the downside, the pharmaceutical sector collectively adjusted, with Joinn Laboratories, Lionco Pharmaceutical Group, and Xinjiang Bai Hua Cun Pharma Tech hitting the limit down. The computing power hardware fluctuates downward, with Shenzhen Techwinsemi Technology hitting three consecutive limit downs and Cig Shanghai and Accelink Technologies hitting the limit down. Looking ahead, GF SEC believes that the process of filling the gap in the high-tech sector has not yet reached completion, and it will take time for market sentiment to stabilize completely. Popular sectors 1. Power sector surges The power sector surged, with DaTang HuaYin Electric Power hitting the limit up, and Leshan Electric Power, Shenzhen Nanshan Power, Hangzhou Cogeneration Group, and Sichuan Xichang Electric Power following suit. Analysis: The National Energy Administration released data on electricity consumption for June. In June, total electricity consumption was 898.1 billion kilowatt-hours, a year-on-year increase of 3.7%. The electricity consumption of the tertiary industry was 186 billion kilowatt-hours, a year-on-year increase of 5.6%; among them, the electricity consumption of electric vehicle charging and swapping services and Internet data services was 14.8 billion and 9.1 billion kilowatt-hours, with growth rates of 57.1% and 41.4%, respectively. 2. Banking sector rises The banking sector has risen against the trend, with BQD leading the way, and Bank of Lanzhou, Chongqing Rural Commercial Bank, and Zhejiang Shaoxing RuiFeng Rural Commercial Bank following suit. Analysis: Zhongtai believes that the certainty of bank performance throughout the year will bring stable returns for bank stocks in 2026, which is short-term and market style related; the ongoing economic development mode (strong policy determination), strong corporate banking business, and continued low-risk preferences of residents will drive interest rate spreads to bottom out and revenue growth to continue, highlighting the strong certainty of results. Institutional views GF SEC: The process of filling the gap in the high-tech sector has not yet fully concluded, and it will take time for market sentiment to stabilize completely. GF SEC believes that this round of adjustment is a concentrated release of internal and external disturbances: externally, overnight, the storage sector of US stocks continued to adjust, coupled with an unexpected rate hike from the Bank of Korea causing the South Korean stock market to plummet by more than 7% in a single day. The leading storage companies in Korea plummeted, directly affecting A-shares through the intense fluctuations in the overseas technology sector; internally, some targets in the half-year performance verification period are not meeting expectations in terms of growth rates, and the concentration of funds taking profits has triggered a chain reaction, further amplifying the magnitude of the adjustment in high-level tracks. In the short term, the process of filling the gap in the high-tech sector has not yet fully concluded, and it will take time for market sentiment to stabilize completely. However, after continuous adjustments, the downward momentum of short positions is quickly releasing, coupled with the approaching World Artificial Intelligence Conference as an industrial catalyst, the sentiment in the sector is expected to see a recovery window in the middle and late part of the month. Founder: It is a high probability event that the market will stabilize later and continue with a structural rise, and it is recommended to focus on individual stocks over indices in terms of operations. Founder believes that the adjustment in A-shares themselves, combined with the global decline in technology, leads to a market decline. The adjustment process is also a release of risk. Some technology stocks with high growth rates and relatively reasonable valuations have released short-selling momentum through this round of adjustment, and once global markets stabilize, they are still likely to become targets for capital accumulation. Although the market continues to adjust, it is a high probability event that the market will stabilize later and continue with a structural rise. It is recommended to focus on individual stocks over indices in terms of operations, seizing opportunities with certainty. Orient: A-share style switches to fund rebalancing and performance validation-driven, and the sustainability of the switch needs to be monitored in the future. Orient believes that the style of A-shares has visibly reversed, with distinct differentiation among different sectors. The technology sector, which was highly sought after in the first half of the year, continues to decline, while the "old" sectors that have been bleeding in the first half of the year show strong performance. Previously, under the catalyst of the grand narrative of AI computing power and massive capital expenditures by tech giants, sectors such as electronics and communications representing the technology sector were shining brightly. However, under the influence of high valuations, realized performance, and severe external volatility, these sectors have suffered severe fund trampling. On the other hand, the market is quietly recovering, with sectors that were previously neglected, or even continuously declining, receiving funds back. Among them, the pharmaceutical and biotechnology industry is leading the way. In the extreme volatility of the market, A-share style shifts to fund rebalancing and performance validation-driven, and the sustainability of the switch needs to be monitored in the future, with a focus on defense and short-term operations. From a technical analysis perspective, the support level for the Shanghai Composite Index after falling below 3900 is around 3870, which is also near the lifeline since the "9.24 market," which, if broken, will return to the major top of the past decade of consolidation, indicating a failure in the market trend over the past two years, hence the probability of the above analysis is low. In terms of allocation, the future market after this adjustment is still dominated by technology. This article is reposted from Tencent Stocks, GMTEight Editor: Wang Qiujia.