A-share market closing review: Shanghai Composite Index slightly decreased by 0.02%, market experienced drastic fluctuations during trading hours! Reasons exposed.

Today, the market fluctuated and consolidated, with the three major indexes falling slightly by the close. The Baijiu and other major consumer sectors saw a long-awaited rebound, and the computing power race continued to erupt. Market turnover exceeded 2.5 trillion, with a decrease of over 100 billion compared to the previous trading day, and nearly 3000 stocks in the two markets rose. It is worth noting that today the A-share market experienced violent fluctuations, as reported by Securities Times, the market is at a "critical juncture" because of excessive volume on August 18th. The turnover of 2.8 trillion yuan was second only to the levels of October 8th and 9th in 2024. At that time, the market was relatively overheated. Although the index did not rise much on August 18th, the market volatility was within a controllable range, but the trading volume and the balance of post-market financing seemed to indicate that the market had entered a relatively high level of heat and a period of relatively large fluctuations. On the market, the computing power industry chain remained strong, with the three leaders Suzhou TFC Optical Communication, Zhongji Innolight, and Eoptolink Technology Inc. hitting new highs collectively, and Cambrian's stock price broke through the 1,000 yuan mark again to set a new historical high. Consumer stocks such as Baijiu rebounded, with Jiugui Liquor hitting the limit up; Huawei concept stocks rose, with ArcherMind Technology (Nanjing) Co. hitting the limit up by 20%; pharmaceutical stocks were strong, led by innovative pharmaceuticals, with multiple stocks including Thalys Medical Technology Group Corporation hitting the limit up. On the downside, the large financial sector weakened, with military, precious metals, and oil and gas sectors leading the decline. Looking ahead, Shenwan Hongyuan Group believes that in the short term, the bullish atmosphere will continue to dominate the market. Before early September, the game will focus on bullish assets. Focus on brokerage, insurance, military, and rare earths. The scarcity of medical and overseas computing power assets is expected to continue the momentum. From a stock perspective, there were 2,984 gainers and 2,255 losers in the two markets, with 185 stocks remaining flat. There were a total of 105 stocks hitting the limit up and 10 stocks hitting the limit down. By the close, the Shanghai Composite Index fell by 0.02% to 3727.29 points, with a turnover of 1.061 trillion yuan; the Shenzhen Component Index fell by 0.12% to 11,821.63 points, with a turnover of 1.5275 trillion yuan. The ChiNext Index fell by 0.17% to 2601.74 points. Capital Flow Today, the main funds focused on grabbing the Baijiu, black home appliances, traditional Chinese medicine, and other sectors. The top stocks in terms of net inflows of main funds included Sichuan Changhong Electric, Guangzhou Kingteller Technology, and Jiangsu Hoperun Software. News Review 1. China Securities Association: Taking multiple measures to support listed companies in carrying out mergers and acquisitions activities On August 19th, the China Securities Association officially released the "Report on Mergers and Acquisitions of Listed Companies (2025)". The Association stated that in the next step, it will take multiple measures to support listed companies in carrying out mergers and acquisitions activities in a standardized manner. It will organize merger and acquisition policy advocacy meetings, jointly conduct industry-finance matchmaking activities with local governments, regularly organize mergers and acquisitions closed-door symposiums, and explore the establishment of a merger and acquisition information platform. 2. "Shanghai Municipality Accelerates the Implementation Plan for the Development of 'AI + Manufacturing'" The Shanghai Municipal Economic and Information Commission issued the "Implementation Plan for Accelerating the Development of 'AI + Manufacturing' in Shanghai". It proposes to support key industries such as electronic information, automobiles, and equipment to deploy industrial robotics in work scenarios with high repetition, high risk, and harm to health, to improve production efficiency and safety. Promote the large-scale application of intelligent robots in assembly, welding, painting, material handling, and other processes. Promote the steel, shipbuilding, and other industries to create human-machine collaborative intelligent manufacturing units, realizing unmanned operation of complex processes. Develop test methods for the safety and reliability of humanoid robotic installations in industrial scenarios and promote the "certified employment" of products. 3. General Administration of Sport: China's sports industry's overall scale has grown at an average annual rate of over 10% in the past five years The State Council Information Office held a series of themed press conferences on the completion of the construction of a sports power during the "14th Five-Year Plan" period, introducing the achievements of the construction of a sports power during the "14th Five-Year Plan" period. It was mentioned that the sports industry has become a new bright spot in economic development. Policies promoting ice and snow economy, outdoor sports, etc., have promoted the improvement of the quality and efficiency of the sports industry, with the total scale of the sports industry growing at an average annual rate of over 10% in the past five years. Concepts like "sports in scenic spots, in streets, in commercial districts", "traveling with sports", and "Su Super" and "Village Super" have become popular. The achievements of outdoor sports development interpret the development concept of "green waters and green mountains are golden mountains and silver mountains", the high-quality development of ice and snow sports stimulates new vitality in the ice and snow economy, and the sports industry adds new momentum to national economic growth and local economic transformation. Market Outlook 1. Shenwan Hongyuan Group: The short-term bullish atmosphere continues to dominate the market Shenwan Hongyuan Group believes that in the short term, the bullish atmosphere will continue to dominate the market. Before early September, the game will focus on bullish assets. Focus on brokerage, insurance, military, and rare earths. The scarcity of medical and overseas computing power assets is expected to continue the momentum. Based on the final selection trend of "anti-interning": China has a high market share in the global manufacturing sector in specific areas, building price alliances, and raising prices domestically and overseas. The focus is on photovoltaics, chemicals, and critical components of some electrical machinery. Short-term high cost-effectiveness in Hong Kong stocks is being priced by funds, suggesting that the weaker performance of Hong Kong stocks than A shares has brought about allocation opportunities. 2. Huatai: Currently may have entered the mid-term bull market Huatai believes that the current market may have entered the mid-term bull market. The uptrend since the beginning of the year has shown structural characteristics, with rapid rotation of sectors, making the pace difficult to grasp. Unlike last year's rapid overall market surge, this year's slow bull market has shown a slow rise followed by a sharp decline, and investors who chase the rise and fall may end up with only partial success. However, the slow rise and sharp decline can help prolong the uptrend and facilitate the formation of a slow bull market. In the short term, the slope of the index rise has increased, indicating an accelerating market trend, and future incremental funding needs to pay attention to the entry pace of ordinary investors. To attract more off-market funds, it may be necessary to wait for a "deafening" signal from the market. 3. Orient: It is expected that the stock indexes in August will not have major adjustment risks Orient believes that this round of market trends shows a feature of "local breakthroughs and multi-point flowering", with various industries, sectors, and thematic opportunities alternately rotating, and this pattern is expected to continue in the future. In the short term, it is expected that the stock indexes in August will not have major adjustment risks, but in the short term, attention should be paid to the impact of the high-rise and fall of stock indexes on sectors with excessive gains. Once the market undergoes an adjustment, the "high-low switch" will become more critical, and it is recommended to continue to focus on trends in industries such as technological independence, innovative pharmaceuticals, military, and robotics with good momentum. This article was reproduced from "Tencent Stock Selection", GMTEight Editor: Liu Jiayin.