A-share Closing Review | Three major indices rose and then fell, closing lower; medical CROs surged against the trend.

On August 13, the three major A-share indices rose sharply before pulling back, collectively closing lower. By the close, the Shanghai Composite Index stood at 3926.96 points, down 0.50%; the Shenzhen Component Index reported 14289.44 points, down 0.87%; the ChiNext Index closed at 3586.04 points, down 0.45%; the STAR Market 50 Index was at 1717.75 points, down 1.11%; and the BSE 50 Index ended at 1097.80 points, down 1.62%. The total trading volume in the Shanghai and Shenzhen markets reached about 2.55 trillion yuan, an increase of approximately 398.5 billion yuan compared to the previous day. In the entire market, 1143 stocks rose, while 4317 fell, with 62 stocks hitting the daily limit up and 4 hitting the limit down, resulting in a profit effect of about 20%. Sectors such as medical services, CROs, innovative drugs, traditional Chinese medicine, electricity, and major state-owned banks led the gains, while precious metals, industrial metals, small metals, glass fiber, education, and real estate sectors saw the largest declines. Driving Factors The indices opened high but retreated, with all three major indices turning negative towards the end of the trading session. The Shanghai Composite Index had the smallest decline, while the BSE 50 saw the largest drop; major state-owned banks and liquor stocks were relatively resilient, with only about 20% of stocks in the entire market rising, while over 4300 fell, indicating a divergence pattern with larger-cap stocks holding up and speculative stocks experiencing broad declines. The pharmaceutical and biotechnology sectors led gains against the trend, with medical services, CROs, innovative drugs, and traditional Chinese medicine sectors seeing significant increases. In terms of news, the heat in the BD transactions in the innovative drug sector continued, with three major transactions completed on August 10. WuXi AppTec announced on August 7 that the U.S. District Court for the District of Columbia approved its preliminary injunction motion, allowing it to avoid immediate adverse effects from being included on the 1260H list during its lawsuit against the U.S. Department of Defense. The non-ferrous metal sector collectively declined, with precious, industrial, and small metals leading the losses. The trading volume in both markets rose to about 2.55 trillion yuan, an increase of approximately 398.5 billion yuan compared to the previous day. Hot Sectors 1. Pharmaceutical/CRO/Innovative Drugs The medical services, CRO, and innovative drug sectors saw the greatest gains, with pharmaceuticals becoming the strongest theme of the day. Boji Medical Technology, Gansu Longshenrongfa Pharmaceutical Industry, and Anhui Wanbang Pharmaceutical Technology hit the daily limit up, Harbin Gloria Pharmaceuticals had four limit-up days over the past five days, and Jilin Yatai achieved three consecutive limit-ups. On the catalyst front, the heat in BD transactions in the innovative drug sector showed no signs of waning, with three major transactions completed on August 10. WuXi AppTec announced that the U.S. District Court for the District of Columbia approved its preliminary injunction motion, temporarily suspending the recognition impact of the 1260H list. 2. Electricity The electricity sector saw a rebound in the afternoon. DATANG POWER, Beijing Jingneng Power, and Jangho Group hit the daily limit up, while Guangdong Meiyan Jixiang Hydropower rose by 9.47%, and Huadian Liaoning Energy Development increased by 9.02%. 3. Computing Power/Super Nodes Computing power leasing and super node concepts were active. Shenzhen Gongjin Electronics and Fujian Star-net Communication hit the daily limit up, Ruijie Networks increased by 13.52%, and Shanghai CDXJ Digital Technology achieved three consecutive limit-ups. Overseas AI computing power companies reported better-than-expected performance, with Nebius's revenue in the second quarter increasing by 454% year-on-year and its stock price rising over 34% overnight, while CoreWeave's revenue doubled, also seeing an overnight increase of over 19%. Declining Sectors Precious metals, industrial metals, small metals, glass fiber, and other sectors saw significant declines that day, with Beijing XIAOCHENG Technology Stock dropping nearly 9%, Zhaojin International Gold falling nearly 8%, Hunan Silver down over 7%, and Jiangsu Chuanzhiboke Education Technology hitting the daily limit down. These sectors had previously seen some gains and were among the largest decliners that day, indicating a clear sector rotation in the market.