A-shares midday | All three major indexes fell, with the ChiNext down over 2%, while military stocks performed strongly against the trend.

On September 2, the three major A-share indices opened lower collectively (Shanghai Composite Index down 0.42%, Shenzhen Component Index down 1.01%, ChiNext Index down 1.35%). In early trading, the market exhibited volatility and weakness, showing a differentiated pattern of "collective index pullback, widespread decline in individual stocks, and military and power grid sectors performing strongly against the trend." By the lunchtime close, the Shanghai Composite Index was down 0.82% at 3947.26 points, the Shenzhen Component Index was down 1.71% at 13635.33 points, and the ChiNext Index was down 2.18% at 3319.39 points, while the BSE 50 index rose 4.55%. Almost 4,000 stocks in the Shanghai and Shenzhen markets saw declines. The total turnover in both markets for the first half of the day was 1.21 trillion yuan, a decrease of 140.3 billion yuan compared to the previous trading day. Main capital flows saw net inflows into sectors like defense and military, building materials, and power grid equipment, while there were net outflows from sectors such as electronics, non-ferrous metals, and semiconductors, with the electronics sector seeing a net outflow of around 11.8 billion yuan; among individual stocks, Far East Smarter Energy had a net purchase of over 1 billion yuan, while Zhongji Innolight experienced a net sale of over 2.7 billion yuan. Market Overview In the market, the hotspots were somewhat chaotic. On the rise, sectors such as military, power grid equipment, PCB, and coal showed activity against the trend, while directions like fiber optics, fiberglass, and oil & gas also performed well; on the decline, sectors such as agriculture, precious metals, and dairy experienced significant drops, and semiconductors and computing hardware continued their adjustments. Overall, the overnight escalation of the conflict between the U.S. and Iran pushed up international oil prices and U.S. Treasury yields, leading capital to flow away from high-valued technology sectors towards military, power grid, and coal sectors. Hot Sectors 1. Military Sector Strong Against the Trend The military sector performed strongly against the trend, with Inner Mongolia First Machinery Group hitting the limit up. Jianshe Industry Group and Anhui Greatwall Military Industry also reached their limit up. North Long Dragon New Materials Tech, Qinhuangdao Tianqin Equipment Manufacturing, and Costar Group followed suit. Commentary: According to CCTV News, on September 1, U.S. troops launched a new round of strikes on targets of the Iranian Islamic Revolutionary Guard Corps inside Iran. Multiple locations along Iran's southern coast were attacked; Iran retaliated by hitting U.S. military bases and downing a U.S. MQ-9 drone, escalating the geopolitical tensions once again. 2. PCB Concept Rebounds Volatile The PCB concept saw a volatile rebound, led by the PTFE sector, with Shenzhen WOTE Advanced Materials achieving five consecutive limits up over nine days, followed by Nanjing Comptech Composites Corporation, Haohua Chemical Science & Technology Corp., Zhejiang Wazam New Materials, and Jiangxi Welgao Electronics. Commentary: According to reports, Panasonic announced an increase in prices for copper-clad laminates (CCL) due to rising costs of copper foil and fiberglass, with the new prices taking effect from September 1, some products seeing increases of up to 30%; previously, KB LAMINATES announced a uniform price increase of 10% for FR-4 copper-clad laminates, indicating that pricing logic from the cost side is being transmitted along the industry chain. 3. Power Grid Equipment Sector Rebounds Volatile The power grid equipment sector rebounded vigorously, with Fujian Nanping Sun Cable and Jiangsu Shemar Electric hitting the limit up. Far East Smarter Energy also reached its limit up, while Jiangsu Yangdian Science & Technology rose over 9%, with Qingdao Hanhe Cable and YINOW ELECTRIC following suit. Commentary: On September 1, the National Energy Administration held a deployment meeting for new power grid construction work, stating that during the 14th Five-Year Plan period, China's electricity demand would maintain an average annual growth of around 5%, emphasizing the urgency to accelerate research and application of new grid technologies such as AI+, flexible grid, intelligent control, and long-term energy storage, while supporting private enterprises to invest in new grid construction actively. 4. Coal Sector Remains Active The coal sector was notably active, with Zhengzhou Coal Industry & Electric Power reaching its limit up (targeting three consecutive limits) before retracting, ultimately closing up 0.56%; Yunnan Coal & Energy also hit the limit up, with Baotailong New Materials, Shanxi Antai Group, Henan Dayou Energy, and Shaanxi Heimao Coking following suit. Commentary: According to reports, on September 1, coking coal entered a fourth round of price increases of 100-110 yuan per ton, effective from September 3, with some steel mills already raising prices, leading to heightened expectations for coking coal price increases, driving activity within the sector.