A-share Market Review | Shanghai Composite Index Gains for Five Consecutive Days, Up 0.67%, Over 4,000 Stocks Rise in Value, with Pharmaceuticals, Military Industry, and Nonferrous Metals Leading the Gains

On August 10, the three major indices of A-shares showed mixed performance, with the Shanghai Composite Index fluctuating upward and achieving five consecutive gains, driven by heavyweight sectors such as ground armaments, precious metals, and liquor. The ChiNext Index briefly dropped over 2.5% during the day but narrowed its loss by the close. By the end of trading, the Shanghai Composite Index rose 0.67% to 3966.59 points, the Shenzhen Component Index increased 0.04% to 14316.96 points, the ChiNext Index fell 0.73% to 3537.21 points, the Sci-Tech Innovation 50 Index declined 0.36% to 1737.77 points, and the BSE 50 Index decreased 1.00% to 1122.88 points. The total transaction volume in the Shanghai and Shenzhen markets was 25,231.03 billion yuan, a decrease of 1413.17 billion yuan from the previous trading day. A total of 4,068 stocks in the market rose, 1,391 fell, with 103 hitting the daily limit up and 5 hitting the limit down, resulting in a 73% gain ratio. Sectors like ground armaments (+5.12%), medical services (+3.92%), precious metals (+3.89%), energy metals (+3.46%), liquor (+2.70%), aquaculture (+4.19%), and hotel restaurants (+4.22%) topped the gains; while communication equipment (-3.67%), CPO, components (-1.25%), and glass fiber (-1.04%) saw the largest declines. Driving Factors On this day, the market displayed a "strong Shanghai, weak Shenzhen, with broad-based stock increases" differentiation pattern. The pharmaceutical sector saw a full breakout, catalyzed by WuXi AppTec's announcement on August 9 that a U.S. court approved a preliminary injunction motion (challenging the adverse impact during the determination period of the 1260H list), along with a 38.9% year-on-year increase in its mid-year revenue for 2026 and its net profit attributable to shareholders breaking 10 billion yuan for the first time, while also raising its annual guidance. The military industry sector gained strength, with institutional research reports indicating that the "14th Five-Year Plan" and military trade orders are expected to be implemented in an orderly manner, providing sustainable performance recovery for the sector, coupled with public offering positions being at historically low levels. The non-ferrous metal sector (precious metals, energy metals, minor metals) collectively rose amid news that the Democratic Republic of the Congo has signed a ministerial decree banning the export of copper concentrate and cobalt concentrate, exacerbating supply shortages. The U.S. non-farm employment in July decreased by 23,000, falling short of expectations, which cooled interest rate hike expectations. This was further supported by Trump's announcement of a $3 billion key mineral investment plan and the 94% year-on-year growth in profits for the non-ferrous metals industry in the first half of 2026. The consumer sector maintained strong momentum, with a 0.5% year-on-year increase in July CPI and the direct selling price of Moutai's flying fairy increased to 1753 yuan per bottle; in terms of box office, the summer season of 2026 has surpassed 8.5 billion yuan, with the new film "Welcome to Dragon Restaurant" by Shen Teng receiving positive reviews. The CPO and communication equipment sectors saw significant declines, as U.S. optical module manufacturer Applied Optoelectronics (AAOI) stated in its earnings call that it plans to expand its capacity more than tenfold over the next two years, alongside rumors that the FCC plans to restrict imports of data center components from China. Hot Sectors 1. **Pharmaceutical Sector**: Innovative drugs and CRO sectors saw a comprehensive breakout. Xinjiang Bai Hua Cun Pharma Tech hit a 5-day limit up, Harbin Medisan Pharmaceutical achieved three limit ups in five days, Harbin Pharmaceutical Group, and Zhejiang Hisun Pharmaceutical achieved two limit ups; Berry Genomics, Guangzhou Kingmed Diagnostics Group, Whole Shine Medical Technology, Shanghai Kai Kai Industrial, Realcan Pharmaceutical Group, and several other stocks hit their upper limit. Sino Biological Inc. rose over 10%. The catalyst comes from WuXi AppTec's announcement of the U.S. court approving a preliminary injunction motion, which challenges the adverse effects during the determination period of the 1260H list, and WuXi AppTec's mid-year revenue for 2026 increased by 38.9% with the net profit attributable to shareholders breaking 10 billion yuan for the first time. Some analysts believe this ruling is a phased victory for WuXi AppTec in protecting its rights in the U.S. 2. **Military Industry and Non-Ferrous Metals**: The military sector surged in the afternoon, with Anhui Greatwall Military Industry and Jiangxi Hongdu Aviation Industry hitting their upper limits, North Long Dragon New Materials Tech rose over 14%, Beijing Jingpintezhuang Science and Technology increased over 12%, and Hebei Keli Automobile Equipment gained over 17%. In the non-ferrous metal sector, Guangdong Xianglu Tungsten hit the upper limit after two limit ups in four days, Tibet Huayu Mining and Zhaojin International Gold also hit their upper limits, while China Tungsten and Hightech Materials and Grinm Advanced Materials rose over 8%, Shengda Resources increased over 7%. On the news front, Chongyi Zhangyuan Tungsten announced the price increase for long-term procurement quotes in early August; China Securities Co., Ltd. research reports indicated that AI infrastructure acceleration combined with overseas military warehouse restocking continues to favor "computing power metals" and "military metals"; Guotou Securities believes that the macro suppression on gold, silver, copper, and tin may have been lifted, recommending increased allocation in these metals. 3. **Consumer and AI Applications**: The food and beverage sector experienced steady gains, with Zhejiang Yiming Food, Baiyang Investment Group, Inc., and Xiangpiaopiao Food hitting their upper limits, and Anhui Yingjiagongjiu rising over 8%. In the film and television sector, Ruyi Film Entertainment and Beijing Jingxi Culture & Tourism hit their upper limits, with the Shenwan Film and Television index accumulating close to a 15% increase since July 27. The AI application sector saw mid-day fluctuations and gains, with Beijing Shiji Information Technology and Fujian Rongji Software hitting their upper limits; the electric grid equipment sector also saw Anhui ZhongDianXinLong Science and Technology, Shenzhen JingQuanHua Electronics, and San Bian Science & Technology hitting their upper limits. Adjusting Sectors The communication equipment sector (-3.67%), CPO, and components (-1.25%), as well as glass fiber (-1.04%), experienced the largest declines. In the CPO concept, Accelink Technologies dropped over 9%, temporarily hitting the limit down, Zhongji Innolight fell over 6%, Eoptolink Technology Inc. decreased over 5%, and Suzhou TFC Optical Communication declined nearly 5%. On the news front, U.S. optical module manufacturer Applied Optoelectronics (AAOI) signaled aggressive capacity expansion (planning to increase production over tenfold in the next two years) amid rumors of the FCC planning to restrict imports of data center components from China. Sinolink pointed out that this adjustment is a correction of supply expectations rather than a collapse in demand, and foreign manufacturers' willingness to significantly expand production indicates that the industry is still in a prosperous state. The aforementioned sectors saw significant increases prior and experienced the largest declines on this day.