A-share Midday Review | The three major indices rallied then pulled back; fiberglass and innovative drug concepts were active, while auto stocks surged.

On September 17, the three major A-share indices opened collectively lower. After the open, declines quickly narrowed, and the three major indices briefly turned positive across the board, with the ChiNext Index rising more than 1%. The indices then pulled back after hitting highs, collectively turning negative during the session and maintaining weak consolidation, closing slightly lower at midday. The market showed a divergent pattern of "indices rallying then pulling back, more decliners than advancers, and rapid rotation of hotspots." As of the midday close, the Shanghai Composite Index fell 0.36% to 3,877.46 points, the Shenzhen Component Index fell 0.29% to 13,415.41 points, and the ChiNext Index fell 0.12% to 3,307.63 points. More than 3,100 stocks in the overall market declined, while 2,260 stocks rose. Half-day turnover in the Shanghai and Shenzhen markets was 1.2445 trillion yuan, an increase of 79.5 billion yuan from the previous trading day. On the capital front, according to Cailian Press monitoring data, in the morning session main funds recorded net inflows into transportation equipment, optical optoelectronics, and building materials sectors, and net outflows from electronics, nonferrous metals, and semiconductors sectors, with the electronics sector seeing net outflows exceeding 6.4 billion yuan. Market Overview On the board, on the upside, innovative drug and AI pharmaceutical concepts were active, fiberglass, planting and forestry, and real estate services sectors led gains, and the auto sector fluctuated higher; on the downside, precious metals and oil and gas extraction and services sectors led declines, while components, minor metals, gas, and other sectors also fell noticeably. Overall, half-day turnover in the Shanghai and Shenzhen markets expanded significantly from the previous trading day, but indices pulled back after hitting highs and hotspot rotation accelerated. Funds sought low-level opportunities in directions such as pharmaceuticals, auto, and planting, while resource sectors such as precious metals and industrial metals came under clear pressure, with more decliners than advancers across the market. Hot Sectors 1. Multiple innovative drug concept stocks hit the limit up Multiple stocks in the innovative drug concept hit the limit up and strengthened (the concept index rose 0.94% in the half-day session), Sichuan Goldstone rose 20CM to the limit up, Xinjiang Bai Hua Cun Pharma Tech and Landfar Bio-medicine hit the limit up, Novoprotein Scientific Inc. touched the 20CM limit up during the session, Anhui Wanbang Pharmaceutical Technology rose more than 10%, and Sino Biological, Inc. and Acrobiosystems followed higher. Comment: On the news front, on September 16, Novo Nordisk and Anthropic announced a partnership to use Anthropic's artificial intelligence models and the Claude Science platform to support drug discovery and development, jointly exploring the application of artificial intelligence across the entire drug R&D process, drawing market attention to the AI pharmaceutical direction; in addition, Sichuan Goldstone recently said during an investor relations activity that multiple products in the company's pharmaceutical and health segment have made substantive progress, among which sales of "Kuaikekuai" amorolfine hydrochloride liniment in the first half of 2026 are expected to show a clear year-on-year increase. 2. Fiberglass sector strengthened The fiberglass sector strengthened, Sinoma Science & Technology hit the limit up at one point during the session and closed the morning up more than 7%, while Chongqing Polycomp International Corporation, Grace Fabric Technology, Jiangsu Changhai Composite Materials, and China Jushi Co., Ltd. followed higher. Comment: On the news front, electronic cloth prices continued to rise. According to Securities Daily, the latest September data from Sublime China Information showed that prices of mainstream products G75 and 7628 electronic cloth in the domestic electronic yarn market recently rose significantly, and most manufacturers further increased price hikes for some high-end electronic yarn models; Cailian Press reported that the ex-factory price of the benchmark 7628 thick cloth rose from about 4.6 yuan/meter in early 2026 to 11 to 12 yuan/meter in September, thin cloth 1080 and 2116 rose more than 140% during the year, and Low-Dk second-generation cloth rose more than 200% during the year. 3. Auto sector fluctuated higher The auto sector fluctuated higher, with Zotye Automobile, Anhui Ankai Automobile, Haima Automobile, and Sensteed Hi-tech Group hitting the limit up, Chongqing Sokon Industry Group Stock rising more than 3%, and Zhongtong Bus Holding and Anhui Jianghuai Automobile Group Corp.,Ltd. following higher. Comment: On the news front, on the evening of September 14, Guangzhou Automobile Group announced that the company signed a Letter of Intent with China First Automobile Co., Ltd., planning to acquire part of the equity of a certain joint venture held by FAW Group by issuing shares and to raise supporting funds; based on preliminary estimates, the transaction is expected to constitute a major asset restructuring and related-party transaction, and after completion FAW Group will become the second-largest and strategically influential shareholder of Guangzhou Automobile Group. In addition, the Ministry of Industry and Information Technology and eight other departments issued the "15th Five-Year Plan for the Development of the Intelligent Connected New Energy Vehicle Industry" on September 11, proposing to promote market-oriented and law-based mergers and reorganizations of automobile enterprises, accelerate cross-regional resource integration, and orderly phase out inefficient production capacity. 4. Planting sector showed strong performance The planting sector showed strong performance, with Gansu Dunhuang Seed Group and Jinjian Cereals Industry hitting the limit up, WanXiang Doneed rising more than 7%, and Hainan Shennong Seed Industry Technology following higher. Comment: On the news front, a Guotou Securities research report on September 16 pointed out that downward revisions to U.S. output pushed global corn production for 2026/27 down to 1.291 billion tons and ending stocks down to 272 million tons, continuing the global destocking trend; a Caixin Securities research report on September 11 showed that China's corn seed production area in 2026 fell 7% year on year, and combined with the impact of high temperatures and drought in some regions on yields, newly produced seeds are expected to decrease and inventory pressure is expected to ease marginally. In addition, the World Meteorological Organization said in a bulletin on September 3 that an El Nio event will continue until February 2027, with near 100% probability, and will reach "super strong" levels in the coming months, with expectations of extreme weather hitting global grain markets. At the policy level, the Cyberspace Administration of China, the Ministry of Agriculture and Rural Affairs, and the Ministry of Industry and Information Technology jointly issued the "Digital Village High-Quality Development Action Plan (2026-2030)" on September 11, proposing to strengthen agricultural science and technology innovation and enhance the construction of innovation carriers such as Jiangsu Nonghua Intelligent Agriculture Technology.