CITIC Securities: The global market is witnessing a decline in quantitative momentum and a recovery in undervalued assets, but a reversal is not yet clear.

CITIC Securities' research report indicates that in July 2026, the previously AI hardware-driven strong cross-market rally experienced significant divergence at high levels. Industries such as pharmaceuticals, consumer goods, and real estate in the Greater China region and South Korea showed signs of recovery but did not form a consistent cross-market trend. From a style perspective, all major stock markets witnessed a notable retreat in momentum and a recovery in low valuations. We believe that the market performance in July is due to a cooling of trend trading previously driven by AI hardware, with funds shifting towards targets with lower valuations and limited prior gains. Considering that the AI industry is still in a highly prosperous phase and has not yet established other consistent mainline trends outside of tech hardware, we believe it is insufficient to confirm a reversal in the medium- to long-term trends of industries and styles.