A-share closing review | Shanghai Composite Index closed up 0.85%, technology stocks led the decline in both cities. Liquor and electricity sectors performed well.

Today, the index fluctuated widely, rising in the morning and falling back, then sharply rebounding after a plunge in the afternoon. The Shanghai Composite Index fluctuated around 3800 points before regaining and losing. Technology stocks led the decline in both markets, with the Shanghai Composite Index showing slightly stronger performance. Looking at the market, technology stocks led the decline, with CPO rising and falling back, Zhongji Innolight, Eoptolink Technology Inc. plummeting. PCB concept weakened, with CCL leading the decline, Baoding Technology, Infund Holding, Goldenmax International, Anhui Tongguan Copper Foil Group all hitting the limit down. Storage concept stocks plummeted, with Shenzhen Techwinsemi Technology hitting the limit down for 4 consecutive days. On the rise, defensive sectors performed well, with the power sector surging, DaTang HuaYin Electric Power, Leshan Electric Power rising for two consecutive days, Chongqing Fuling Electric Power Industrial, Jinneng Holding Shanxi Electric Power hitting the limit up. The coal sector was strong, with Beijing Haohua Energy Resource, Henan Dayou Energy, Zhengzhou Coal Industry & Electric Power hitting the limit up. Liquor concept stocks fluctuated and rose, with Anhui Gujing Distillery hitting the limit up. The pharmaceutical sector fluctuated and rebounded, with Gansu Longshenrongfa Pharmaceutical Industry hitting the 20% limit up. It is worth noting that during the sharp decline, the turnover of the CSI 500 and CSI 1000 index ETFs continued to increase in the afternoon. The South China CSI 500 ETF had a turnover of more than 7.5 billion yuan, and the CSI 1000 ETFs of E Fund, Jia Shi, and Fu Guo had a turnover of more than 1 billion yuan, all exceeding the full-day turnover on the previous Friday. In addition, the Huaxia CSI 50 ETF had a turnover of more than 11 billion yuan. In addition, the Huaxia CSI 50 ETF briefly rebounded to turn positive. Looking at individual stocks, there were 1740 gainers and 3710 decliners in the two markets, with 78 stocks remaining unchanged. 55 stocks hit the limit up, while 267 stocks hit the limit down. At the close, the Shanghai Composite Index rose 0.85% to 3796.28 points, with a turnover of 1.2947 trillion yuan; the Shenzhen Component Index fell 0.71% to 13610.23 points, with a turnover of 1.3982 trillion yuan. The ChiNext Index rose 0.42% to 3443.10 points. Outlook for the future, Citigroup downgraded South Korean stock ratings in emerging market asset allocation and upgraded Chinese stock ratings. Funds flow Today, the main funds focused on grabbing power, IT services II, liquor II, insurance II, refining and trading industries; funds net outflow from semiconductor, components, communication equipment, optical optoelectronics, automation equipment and other industries. News review 1. Korean stocks fell nearly 4.46%: SK Hynix, Samsung Electronics down over 4% The Korean Composite Index closed down 304.33 points, a decrease of 4.46%, to 6516.27 points. SK Hynix fell 4.23%, and Samsung Electronics fell 4.31%. 2. China Pacific Insurance: will continue to invest in technology growth, consumption, new energy stocks and ETFs China Pacific Insurance announced at noon that since the beginning of this year, the company has continued to leverage the long-term investment advantages of insurance funds and increased the proportion of equity allocation. In the future, the company will continue to invest in technology growth, consumption, new energy stocks and ETFs to support the cultivation and development of new productive forces, become a truly patient capital in the market. In 2026, the company will focus on optimizing the dividend rhythm, actively preparing for mid-term profit distribution, following the resolution of the 2025 shareholders' meeting, authorize the board of directors to decide the mid-term profit distribution plan in 2026, enhance dividend stability, continuity, and predictability, and further enhance investor satisfaction. 3. Since July 17, 39 companies in the Shanghai market have disclosed additional buyback plans According to incomplete statistics, since the evening of July 17, 39 companies in the Shanghai market have disclosed announcements related to additional buybacks. Among them, 9 companies have disclosed new buyback plans with a total maximum amount of 900 million yuan. Since July, a total of 212 companies in the Shanghai market have disclosed buyback announcements, with 58 companies adding new buyback plans with a total planned maximum of 8.1 billion yuan. Future judgment 1. Citigroup: Downgrade South Korea and upgrade Chinese stock ratings Citigroup downgraded the rating of Korean stocks in emerging market asset allocation and upgraded the rating of Chinese stocks, citing the volatile trading in the Korean market and the potential benefits to the Chinese market as the trend of the year moves from the rise dominated by a few artificial intelligence winners to a more widespread sector. David Groman and other Citigroup strategists wrote in a report, "If the macro environment continues to be favorable, including the easing of geopolitical risks, there is room for an expanded range." Citigroup downgraded the rating of the South Korean stock market from "overweight" to "tactical neutrality". At the same time, Citigroup upgraded the rating of the Chinese stock market to "overweight" and the rating of the Mexican market to "neutral", considering them as potential targets for expanding the range of rising trends in emerging markets. 2. CITIC SEC: The index market is in a stage of consolidation from a mid-term trend to a new trend CITIC SEC research report pointed out that there are four judgments at present. First, the index market is in a stage of consolidation from a mid-term trend (characterized by the decline of the technology sector) to a new trend (requiring the launch of new sectors with valuation upside potential), and the short-term liquidation is nearing its end. Second, the short-term market of the North American AI chain may be a safe haven within the technology industry, and around the end of July, a wave of recovery may come with the guidance of the North American CSP, but reaching a new level requires a new leap in AI model/product capabilities and business expansion space, and it is crucial to break the valuation framework of hardware company cyclical stocks and achieve a new round of system-level uplift in hardware and applications. Third, the domestic AI chain highly depends on catalysis and trend capital intensity, with the main catalysts already being fulfilled, and the intensity of trend capital after experiencing a sharp retreat is unlikely to return quickly. The relatively healthy financing disk in the domestic market means there is no point for layout as chips are cleared, and the possible convergence of valuations between domestic and North American markets is likely. Fourth, the non-AI chain is characterized by rotating repair, starting from innovative drugs and non-banking sectors, transitioning to industrial chains of non-ferrous metals, chemicals, and lithium batteries, with policy expectations for domestic demand chains in between. 3. China Securities Co., Ltd.: Kimi K3 model reaches global Tier1, domestic models once again show DeepSeek moments China Securities Co., Ltd. released a research report stating that it firmly believes in the trend of the AI industry. K3 is a watershed event in the global large model industry this week, and another DeepSeek moment: the release of K3 signifies that the Chinese large model has entered the global large model narrative for the first time as a "competitive threat" - 2.8 trillion parameters + 1 million contexts + Code Arena dominating, proving that domestic models have engaged with leading-edge American models in Agentic Coding. Other recommendations focus on application layer opportunities. This article is reproduced from "Tencent Self-selected Stocks", GMTEight editor: Liu Jiayin.