A-share markets are currently in a phase of platform consolidation following a recent rebound. The Shanghai Composite Index closed at 3927.18 points, barely inching up 0.01%. The Shenzhen Component Index performed stronger, rising 0.45%, while the ChiNext Index led the gains, surging 1.12%. The STAR 50 Index remained flat. Overall, the Shenzhen market significantly outperformed the Shanghai market, with small-cap growth stocks taking the lead. At the sector level, gains were concentrated in communications, gaming, coal, and non-ferrous metals, with communications leading the charge. Consumer and pharmaceutical sectors experienced some pullback. In terms of volume, the total turnover of the Shanghai and Shenzhen markets was approximately 2.16 trillion yuan, a decrease of 410 billion yuan from the previous trading day, indicating subdued market sentiment. Declining stocks outnumbered gainers across the market, with 2,398 stocks rising and 2,963 falling, resulting in generally weak profit-making opportunities.
Looking back at this week's market, overall performance was muted. While the market generally continued the repair trend from last week's style rotation, the pace of repair slowed and volatility increased, characterized by intraday flash crashes, faster internal rotation, and a lack of synchronized volume expansion. This suggests a clear divergence in investor sentiment. Although the index may not look too bad, generating profits is challenging, relying heavily on capturing the rhythm of style and sector rotation. Against the backdrop of volatile repair, funds are shifting from high-crowding themes to mid-year report trades in small and mid-cap stocks and multiple growth drivers. From a broad-based index perspective, the week repeatedly validated the dominance of the small-cap style. Looking at volume and drawdown structure, this week is far from a phase of indiscriminate upward movement. It is more akin to a process of shrinkage repair, accelerated rotation, and a return to performance and earnings verification. Since total market funds have not significantly expanded, a direction that rises too quickly is prone to profit-taking pressure, making the "one day strong, one day rest" rhythm particularly evident this week.
On Monday, consumer, pharmaceutical, and pro-cyclical sectors performed well, while the tech hardware sector came under pressure, displaying a clear seesaw effect. The number of gainers was higher, and the style was spreading to small and mid-cap stocks. On Tuesday, affected by a pullback in overseas risk appetite, the market declined overall, with most stocks falling. The precious metals equity sector saw a significant correction as market funds deleveraged ahead of the US CPI data release. On Wednesday, growth sectors recovered, with the optical communication direction leading the gains. This was supported by better-than-expected overseas corporate earnings reports, validating the industry chain's prosperity as the market awaited US inflation data. On Thursday, the market was pressured by rumors that the Bank of Japan might consider raising interest rates in September or October. Intraday, the market fell, capital divergence became more apparent, and the willingness to take profits increased. However, the innovative drug industry chain saw a significant rebound, driven by new narratives in AI pharmaceuticals, upward revisions to CXO orders and earnings guidance, and the temporary clearing of geopolitical headwinds. The pharmaceutical sector became a strong theme. On Friday, the market maintained structural divergence, with growth sectors relatively dominant and the communications sector trending upward. At the broad-based index level, the small-cap style remained dominant, making the CSI 1000 Enhanced ETF (159679) worth considering. Large-cap stocks performed relatively flat, making broad market rallies more difficult and placing a higher premium on stock selection and portfolio allocation.
Overseas, Hong Kong stocks showed some weakness this week compared to the previous period. From a capital flow perspective, while there have been signs of foreign active and passive funds flowing into Hong Kong stocks recently, they are mainly driven by transaction-oriented funds like hedging positions from the Korean market. Trend-based allocation funds have not yet shown a significant inflow. Fundamentals have not provided strong support for upward revisions. The significant increase in capital expenditure by internet platforms, leading to temporarily negative free cash flow, has cast doubt on the market's confirmation of a fundamental turning point. Additionally, Hong Kong stocks have reached a dense concentration of positions during the previous rebound cycle, creating significant resistance. Short-term judgment suggests the market will likely remain in a state of consolidation and digestion, requiring attention to changes in overseas liquidity expectations and the transmission effect of the pace of domestic fundamental repair on Hong Kong stocks.
This week, the technology sector experienced volatile rebound, with the communications sector performing relatively prominently. After a deep correction in July, valuations in some technology sub-sectors have returned to relatively reasonable levels. The prosperity of directions like optical communication continues to be validated by earnings reports. Lumentum's earnings exceeded expectations, and management's signals indicated that the NPO solution is gaining customer acceptance. China holds the initiative in key areas like indium phosphide, and concerns about the FCC ban have somewhat weakened. The industry trend remains unchanged. Global AI capital expenditure is still being revised upward, with both domestic and international cloud vendors and internet platforms increasing infrastructure investment. However, in the short term, it may continue to be affected by overseas policies and macro data fluctuations. Although the overall trend was stable in the latter half of the week, suggesting some upward technical momentum, it is important to note that volatility remains relatively high. It is recommended to track from a neutral perspective at lower levels and be cautious of black swan events. Interested investors may continue to monitor the Communication ETF (515880).
The innovative drug sector showed high elasticity throughout the week. There have been multiple recent catalysts. In the short term, it is the industrial realization of AI pharmaceuticals. Overseas company Twist released its 26 Q3 earnings, with overall performance exceeding market expectations. Revenue from DNA synthesis and protein solution businesses grew year-on-year. This can be transmitted to upstream CRO sectors like DNA synthesis, protein preparation, wet experiments, and data services, and then gradually to the innovative drug end, shortening R&D cycles and accelerating product launch timelines. Looking back at the market, AI pharmaceutical stocks like Tempus and Schrodinger have also sparked rallies before, which were later replaced by new industrial logic. Therefore, the sustainability of this round of rallies will depend on whether Twist's orders can continue to materialize, and one must also be wary of the risk of pullback as theme enthusiasm fades. In the long term, the realization of mid-year report earnings remains a core support. The CDMO leader has significantly raised its full-year guidance, increasing its continuing operations revenue growth forecast from 18%-22% to 35%-39%. The innovative drug leader's BD confirmation of profit turnaround/overseas sales growth continues to unfold. Combined with the temporary clearing of the 1260H list geopolitical headwind, the sector may have a Davis Double Play opportunity. Interested investors may consider the 20cm high elasticity, 70%+ innovation content, high pre-clinical CRO content Sci-Tech Innovation Drug ETF (589720), and the Hang Seng Biotech ETF (520930) for a one-stop layout of Hong Kong's innovative drugs and CXO leaders. It is advisable to build positions in batches at lower levels and be cautious of chasing highs.
Gold is another direction worth watching. In terms of price performance, following a strong rebound after a long period of support and bottoming around the $4,000/oz level for international spot gold last week, with the single-week gain being the largest in nearly seven months, this week it remained in a high-level consolidation range of $4,300-$4,500 after the rebound repair. This is, to some extent, a further confirmation of a phased bottom. The core driver of this round of gold rebound mainly comes from the significant correction in market expectations for interest rate hikes following the weak US employment data. However, the medium-term support for gold is not solely based on interest rate expectations, but also on continued central bank gold purchases and the rebalancing of global reserve structures. Since April 2026, as gold prices have fallen, the monthly net gold purchases by global central banks have recovered quickly. This suggests that in the current macro environment, gold may not always rise rapidly in a straight line, but once it corrects, allocation buying is more likely to emerge. In the second quarter of 2026, global central banks' net gold purchases were approximately 288.9 tons, a quarter-on-quarter increase of 411% and a year-on-year increase of 62%. The People's Bank of China held 76.08 million ounces of gold reserves at the end of July, marking the 21st consecutive month of increase. Events like the Bank of Korea's medium-term plan to expand the proportion of gold in its foreign exchange reserves and purchase gold-backed ETFs also constitute a solid underlying support for gold in the medium to long term.
However, gold faces two types of short-term disturbances. First, the $4,400-$4,500 level is a technical and psychological resistance zone, which is prone to short-term fluctuations. Second, the subsequent policy path of the Federal Reserve, oil price changes, economic data, and geopolitical risks could still cause significant volatility in gold. However, in the long run, medium to long-term factors such as fiscal deficits, geopolitical tensions, and currency concerns still support gold demand. Interested investors may consider the Gold ETF (518800) to capture the medium to long-term allocation value of gold.
Risk Warning: Investors should fully understand the difference between fixed-amount investment in funds and savings methods like installment deposits. Fixed-amount investment is a simple and easy way to guide investors in long-term investment and average investment costs. However, fixed-amount investment cannot avoid the inherent risks of fund investment, cannot guarantee investor returns, and is not an equivalent financial management method to savings. Whether it is stock ETFs/LOFs/leveraged funds, they are all securities investment fund products with relatively high expected risk and expected return. Their expected return and expected risk levels are higher than hybrid funds, bond funds, and money market funds. Fund assets invest in the Sci-Tech Innovation Board and the ChiNext Board, which will face specific risks due to differences in investment targets, market systems, and trading rules. Investors are advised to take note. The short-term rise and fall of sectors/funds are listed only as auxiliary materials for the analysis of the article and are for reference only, not constituting a guarantee of fund performance. The short-term performance of stocks mentioned in the text is for reference only, does not constitute a stock recommendation, nor does it constitute a prediction or guarantee of fund performance. The above views are for reference only and do not constitute investment advice or promises. If you need to purchase related fund products, please pay attention to the relevant regulations on investor suitability management, conduct risk assessments in advance, and purchase fund products of the corresponding risk level according to your own risk tolerance. Funds are risky, and investment must be cautious. Special author: Guotai Fund. MACD golden cross signal forms, these stocks are showing good momentum!