On Wednesday, July 24th, the A-share market experienced a rare "low volume" trading day, with turnover shrinking below the 2 trillion yuan mark. Sector rotation was scattered, and no clear market theme emerged. Despite this, capital flows into ETFs continued strongly, with a notable shift towards a balanced split between broad-based and sector-specific funds.

Data shows that on July 24th, a total of 205.8 billion yuan flowed into ETFs across the entire market. Within this, equity ETFs attracted 135.4 billion yuan in net inflows, with broad-based ETFs and thematic ETFs gathering 66.1 billion yuan and 65.4 billion yuan, respectively. Institutions believe that policy support and long-term capital inflows provide some market stability, but the continuous volume contraction and widespread stock declines suggest the market is primarily driven by technical repairs after oversold conditions and trading among existing investors.

The semiconductor sector attracted the most buying interest, with over 54 billion yuan flowing into ETFs tracking semiconductor materials, equipment, and related sectors. Over the past five days, CSI 300 Index ETFs saw over 198 billion yuan in inflows, while STAR 50 Index ETFs attracted more than 189 billion yuan. On the flip side, the securities company sector experienced significant outflows, with nearly 30 billion yuan exiting in a single day. Following a sharp rise in gold prices, some investors took profits, leading to approximately 25 billion yuan flowing out of gold ETFs. Other sectors with over 20 billion yuan in daily outflows included the Hang Seng Tech Index, the CSI 1000 Index, and the ChiNext Index.

Looking at the top 20 ETFs by net inflows on July 24th, the focus was on fixed-income, broad-based, and sector-specific themes. The Haitong CITIC Short-Term Financing ETF led the way with a single-day inflow of 47.49 billion yuan. A total of five CSI 300 ETFs from Huatai-PineBridge Fund, E Fund Management, China Asset Management (ChinaAMC), Harvest Fund, and Penghua Fund collectively brought in 30.10 billion yuan. Additionally, three CSI A500 ETFs from Huatai-PineBridge Fund, Guotai Asset Management, and China Southern Fund recorded combined inflows of 14.22 billion yuan. Thematic ETFs focused on semiconductor materials and equipment, as well as power grid equipment, saw significant buying as prices fell, with ChinaAMC and E Fund thematic ETFs in this area netting nearly 12 billion yuan in total.

On a weekly basis from July 20th to 24th, the top three fund companies by net inflows were ChinaAMC (267.95 billion yuan), E Fund (242.46 billion yuan), and Huatai-PineBridge Fund (228.19 billion yuan). On July 24th, ChinaAMC saw strong inflows into its STAR Semiconductor ETF and Power Grid Equipment ETF, which recorded net inflows of 6.45 billion yuan and 4.26 billion yuan, respectively. Similarly, E Fund attracted significant capital with its Semiconductor Equipment ETF and CSI 300 ETF, which saw net inflows of 5.3 billion yuan and 4.4 billion yuan, respectively.

Market participants are now viewing the current environment as a potential strategic buying opportunity. Guotai Asset Management noted that margin debt has fallen by over 200 billion yuan from its peak, a degree of contraction exceeding that seen during the April 2025 tariff dispute and the February 2026 "Warsh Shock," suggesting that microscopic trading exhaustion is relatively complete. They believe that with sustained net inflows into broad-based ETFs and support from market stabilization forces, the negative impact from trading levels is diminishing. Fortune SG Fund advised maintaining strategic patience during this bottom-building process, waiting for the resolution of uncertainties like overseas deleveraging progress, earnings verification, and monetary policy guidance. They concluded that the "selling of emotions" is nearing its end, while the strategic "buying of facts" opportunity may be approaching.