A-shares Closing Review | Low Opening and High Rise, All Lines Rebound, Science and Technology Innovation 50 Soars 4.78%, Semiconductor Equipment and Electronic Materials Surge Across the Board.

On August 5, the market experienced a volatile rebound, with the three major indices opening lower and closing higher. By the end of the day, the Shanghai Composite Index rose by 1.47% to 3878.43 points, the Shenzhen Composite Index increased by 1.86% to 14144.20 points, the ChiNext Index gained 1.32% to 3535.14 points, and the Sci-Tech 50 Index led the major indices with a rise of 4.78% to 1693.67 points. The BSE 50 index increased by 2.37% to 1119.46 points. The total trading volume in the Shanghai and Shenzhen markets reached 26.59635 trillion yuan, an increase of 446.043 billion yuan compared to the previous trading day. A total of 3725 individual stocks rose, 1621 fell, with 105 hitting the daily limit up and 1 hitting the limit down, resulting in about 67% of stocks closing higher. In terms of market performance, target materials (+9.75%), glass and fiberglass (+7.90%), electronic chemicals (+7.86%), precious metals (+7.72%), components (+6.57%), and semiconductors (+5.80%) saw the largest gains. Conversely, communication equipment (-1.98%), large state-owned banks (-1.67%), liquor (-1.53%), banks (-1.14%), traditional Chinese medicine (-1.01%), and electricity (-0.66%) faced the largest declines. Driving Factors On this day, A-shares experienced a broad-based rebound, with the Sci-Tech 50 leading the way up by 4.78%, while semiconductor equipment, target materials, and MLCCs in the tech hardware sector saw strong performances. Trading volume in both markets surged to over 440 billion yuan, reaching 2.66 trillion yuan, indicating a significant recovery in market activity. Overnight, the three major U.S. stock indices all closed higher, with the Nasdaq index up 2.59%. AMD reported Q2 2026 revenue of $11.54 billion, an increase of 50% year-on-year, and adjusted earnings per share up 246% year-on-year, further boosting global semiconductor market sentiment. On the news front, according to Reuters, South Koreas Samsung Electronics and SK Hynix are evaluating the use of Chinese semiconductor manufacturing equipment for their factories in China. Samsung Electronics subsequently denied the report, while SK Hynix declined to comment; the semiconductor equipment sector significantly strengthened as a result, with Shanghai Gentech 20CM hitting the daily limit up, Advanced Micro-Fabrication Equipment Inc. China rising by 12.67%, and Piotech Inc. rising by 12.14%. The Semiconductor Equipment and Materials International (SEMI) predicts that global sales of semiconductor equipment will reach $165.9 billion in 2026, a year-on-year increase of 23.2%, and is expected to rise to $229.5 billion by 2028. In terms of electronic fabrics, a Citibank report citing SCI99 data stated that in August, the average price of the three major electronic fabric series1080, 2116, and 7628rose by 17%-18% month-on-month, with a cumulative increase of 118%-165% within the year, leading to significant profit growth among several leading fiberglass companies. In terms of popular sectors: 1. Semiconductor Equipment and Target Materials: Shanghai Gentech 20CM hit the daily limit up, Advanced Micro-Fabrication Equipment Inc. China rose by 12.67%, Piotech Inc. was up 12.14%, with multiple stocks including Grinm Advanced Materials, Castech Inc., Zhuhai Bojay Electronics, and JHT Design Co., Ltd. (2 consecutive limit ups) also hitting the daily limit up. Konfoong Materials International rose by 11.16%. News indicates that Samsung Electro-Mechanics has raised the shipping price of MLCC by 30% since August 1, combined with SEMI's forecast which predicts that global semiconductor equipment sales will reach $165.9 billion by 2026, with the domestic substitution and price increase expectations resonating. 2. Glass, Fiberglass, and Electronic Fabrics: Sinoma Science & Technology and Grace Fabric Technology hit the daily limit up, Chongqing Polycomp International Corporation increased by 14.04%, China Jushi Co., Ltd. closed up 8.54%, and Shandong Fiberglass Group Corp. rose by 7.28%. This was driven by the 17%-18% month-on-month increase in average prices of electronic fabrics in August (according to Citibank citing SCI99 data), with China Jushi Co., Ltd. forecasting a year-on-year net profit growth of 65%-85% in the first half of the year, Chongqing Polycomp International Corporation projecting a 151%-194% increase, and Grace Fabric Technology forecasting a 280%-364% increase, indicating that the electronic fabric industry is seeing simultaneous growth in volume and price, creating profit opportunities. 3. Intelligent Driving and AI Computing Power: Shenzhen Soling Industrial, Zhejiang Shibao, Xingmin Intelligent Transportation Systems, and Sensteed Hi-tech Group hit the daily limit up. Jiangsu Lettall Electronic had 3 limit up in 4 days, Foxconn Industrial Internet hit the limit up, Unisplendour Corporation rose by 7.63% during trading and reached the limit, and Jiangsu Chuanzhiboke Education Technology hit the daily limit up. AI applications continued to perform strongly, with Newcapec Electronics and Beyondsoft Corporation hitting the daily limit up. A report from China Galaxy Securities pointed out that the domestic large model Kimi K3 has achieved rapid adaptation to multiple domestic computing platforms from Day 0, driving the demand for domestic super nodes, which in turn boosts the supporting demand for server, switch, optical module, and liquid cooling industries. Adjusting Sectors The communication equipment sector fell by 1.98%, leading the decline in the two markets, with Zhongji Innolight in the CPO/optical communication segment dropping by 7.27% and Eoptolink Technology Inc. falling by 5.29%. On that day, Zhongji Innolight's trading volume exceeded 67.5 billion yuan, setting a record for historical volume. The large state-owned banking sector declined by 1.67%, the liquor sector fell by 1.53%, and the electricity sector decreased by 0.66%. The tech hardware stocks in the aforementioned sectors had seen significant increases previously, with the CPO sector rising over 10% on August 4, leading to a pullback on this day.