A-share morning market express | A-share trends diverge, Hainan free trade zone concept active, rare earth sector strong again.

On July 24th, A-shares showed differentiation in trends. As of 9:37, the Shanghai Composite Index fell by 0.02%, the Shenzhen Component Index rose by 0.37%, and the ChiNext Index rose by 0.77%. In terms of market performance, the Hainan Free Trade Zone concept was hot, with stocks like Caissa Tosun Development hitting the limit up. Biopharmaceutical concepts such as Fentanyl and Monkeypox showed strength. The rare earth permanent magnet sector was active again, with Beijing Zhong Ke San Huan High-Tech hitting the limit up. Additionally, AI computing power and PCB concepts also performed well. On the downside, the Ya Xia Hydroelectric concept showed clear differentiation and a pullback, the large financial sector weakened, and sectors like precious metals, steel, photovoltaics, and electric grid equipment led the declines. Looking ahead, Orient stated that in the short term, the upward trend in the market remains unchanged. As long as this rotation continues, the market's trend of significant rises with minor corrections will not fundamentally change. Of course, short-term healthy corrections are also necessary. Hot Sectors 1. Biopharmaceutical sector activity Biopharmaceutical concepts such as Fentanyl and CRO were active. Stocks like Guangzhou Wondfo Biotech, Hangzhou Biotest Biotech, and Hitgen Inc. saw gains. Institutional Views 1. Huatai: The upward trend will continue, but beware of sharp declines Huatai stated that from recent market trends, there is a strong willingness for funds to go long. Even if there are intraday sell-offs, funds quickly enter the market. If everyone is waiting for a major correction to buy low, then an adjustment may not come easily. Looking at the performances of different sectors, there is no sign of a high open and low close, indicating that the market has a certain money-making effect through thematic speculation. While some investors may say that technology stocks have not performed well, in a strong bull market, all sectors will rotate, and the technology sector will also play a crucial role when the index breaks through. In the short term, whether market turnover can return to 2 trillion is worth monitoring. The historically high margin balance indicates that the market's trading enthusiasm is high, and the upward trend will continue. It is important to be wary of sharp declines, but there is no need to be overly concerned. The crucial meeting at the end of the month may provide guidance on future investment opportunities, with a focus on potential policies regarding childbirth. 2. Cinda: Undervalued cyclical stocks may herald the bull market entering the main upward stage Cinda pointed out that previously oversupplied cyclical industries (such as photovoltaics, steel, and chemicals) are showing some performance recently, which may be a signal that the bull market is entering the middle stage of the main upward wave. The underlying reason for this may be valuation. In the early stages of a bull market, there is less incremental capital in the stock market, the gains are slow, and only a few sectors with logical industry and performance directions can rise. However, in the mid to late stages of the bull market, household funds increase, and most industries' valuations can rise significantly. Cyclical stocks have almost no valuation increase at the beginning of the bull market. Therefore, in the mid-term of the bull market, the valuation advantage of cyclical stocks becomes prominent. If there is policy stimulation or fundamental improvement, the probability of stock price outperforming the index is high. 3. Orient: Traditional and pan-technology industries expected to play a key role Orient stated that in the short term, the upward trend in the market remains unchanged. The financial sector, which has a strong impact on the index, is also an important player in the sector rotation. As long as this rotation continues, the market's trend of significant rises with minor corrections will not fundamentally change. Of course, short-term healthy corrections are also necessary. From a technical perspective, although there have not been significant daily gains recently, the continuous accumulation of positive candles is boosting market confidence, indicating that the Shanghai Composite Index may break through the previous high point in October last year. Traditional industries led by large financial sector and the pan-technology industry are expected to play a key role. This article is reproduced from Tencent Stock Picks. Editor: Jiang Yuanhua.