China's three major A-share indices opened slightly higher on August 10. The early session saw divergence, with the Shanghai Composite Index outperforming the Shenzhen component. Both markets recovered in the afternoon, with the Shanghai Composite Index expanding its gains, the Shenzhen Component Index turning positive by the close, and the ChiNext Index narrowing its losses.
From a sector perspective, consumer stocks were strong, with the baijiu and food sectors leading the gains. Pharmaceutical and biotech stocks were active, particularly in the innovative drug segment. Coal, infrastructure, defense, and gold sectors also posted gains. The computing hardware supply chain faced adjustments, with indices for servers, CPO, and memory underperforming.
At the close, the Shanghai Composite Index rose 0.67% to 3966.59 points. The Shenzhen Component Index inched up 0.04% to 14316.96 points. The ChiNext Index fell 0.73% to 3537.21 points.
According to Wind statistics, a total of 4,066 stocks on the two exchanges and the Beijing Stock Exchange rose, while 1,386 fell, and 80 remained flat. The combined turnover of the Shanghai and Shenzhen markets was 2,523.1 billion yuan, down 141.3 billion yuan from the previous session's 2,664.4 billion yuan. Shanghai's turnover was 1,166.9 billion yuan, down from 1,209.5 billion yuan, while Shenzhen's turnover was 1,356.2 billion yuan.
According to DZH VIP, 138 stocks across the two exchanges and the Beijing Stock Exchange rose by more than 9%, while 13 stocks fell by more than 9%.
Agriculture and Food & Beverage Sectors Surge
The agriculture, forestry, animal husbandry, and fishery sector led the gains, with stocks like Baiyang Investment Group Inc. (002696), Shandong Yisheng Livestock & Poultry Breeding Co., Ltd. (002458), and Bangji Technology Co., Ltd. (603151) hitting their daily price limits. Others, such as Andre Juice Co., Ltd. (605198), Ningxia Xiaoming Agriculture & Animal Husbandry Co., Ltd. (300967), and Yunnan Shennong Agricultural Group Co., Ltd. (605296), rose by more than 5%.
The food and beverage sector also saw strong gains, with stocks including Royal Group Ltd. (002329), Xiamen Kingdomway Group Company (002626), Xiangpiaopiao Food Co., Ltd. (603711), Zhejiang Yiming Food Co., Ltd. (605179), and Henan Lianhua Gourmet Powder Co., Ltd. (600186) hitting their daily limits. Anhui Yingjia Distillery Co., Ltd. (603198) and Pinlive Foods Co., Ltd. (300892) rose by over 8%, while Eastroc Beverage (Group) Co., Ltd. (605499) and Guangzhou Lige Technology Co., Ltd. (300973) gained over 6%.
Coal stocks advanced, with Pingdingshan Tianan Coal Mining Co., Ltd. (601666), Anhui Xinli Energy Co., Ltd. (601918), Shaanxi Coal Industry Company Limited (601225), Henan Dayou Energy Co., Ltd. (600403), Guizhou Panjiang Refined Coal Co., Ltd. (600395), and Shanxi Lanhua Sci-Tech Venture Co., Ltd. (600123) all rising by over 3%.
The semiconductor sector weakened, with the communication and electronics sectors leading the declines. Stocks such as Lianchuang Optoelectronics Co., Ltd. (600363) and Wuhan Fingu Electronic Technology Co., Ltd. (002194) hit their daily limits or fell by over 10%. Suzhou China Micro Semiconductor Co., Ltd. (688693), Wuhan Yangtze Optical Technology Co., Ltd. (688143), Accelink Technologies Co., Ltd. (002281), Tongyu Communication Inc. (002792), and Shenzhen Fastprint Circuit Tech Co., Ltd. (688655) fell by over 7%.
The computer sector also declined, with Beijing YJK Building Software Co., Ltd. (300935) and Netac Technology Co., Ltd. (300042) dropping by over 9%, and Hengyin Technology Co., Ltd. (603106), Pioneer MES Tech Co., Ltd. (688109), and Kai Wang Technology Co., Ltd. (301182) falling by over 5%. The machinery sector was sluggish, with Xi'an Bright Laser Technologies Co., Ltd. (688813) dropping over 8%, and Yanmak Technology Co., Ltd. (688312) and Dongwei Technology Co., Ltd. (688700) falling by over 5%.
Structural Market Trends Expected to Remain the Main Theme
A research report from Huatai Securities indicated that last week, the A-share market saw a moderate rebound with increased volume, a marginal improvement in risk appetite, and a rebound in oversold stocks as the main trading theme, with small-cap stocks showing significantly stronger elasticity than large-caps. Looking ahead, Huatai Securities believes that the oversold rebound still has room to play out, with a focus on the ChiNext Index. In terms of rhythm, the mid-report season in mid-to-late August may be a window to test the strength of the rebound. For allocation, Huatai recommends a balanced approach anchored to mid-report results. The oversold rebound in AI hardware is still viable, but unsold public fund positions may limit the upside, so controlling position exposure is necessary, with communication equipment being the preferred choice. Among other oversold sectors, energy metals and minor metals are recommended. For sectors that were relatively resilient in July, the report suggests continuing to focus on non-bank financials and CXO leaders with good risk-reward ratios. From a medium-term perspective, the overseas expansion chain and essential consumer goods are in a window for increased allocation. The dividend-based bottom position should be held, with a structural focus on banks and transportation.
A research report from Soochow Securities stated that from the perspectives of market volatility, stock price positioning, congestion, and financing, the current market has entered a phase of declining volatility and bottom-building. The upcoming August earnings season will be a key inflection point for the AI main line to potentially strengthen again.
China Galaxy Securities noted that the A-share market in August is shifting from "expectation trading" to "reality verification," focusing on three key themes: earnings, policy, and external risks. The first is earnings verification. The mid-to-late August period is the most intensive window for A-share mid-report disclosures, and the market is expected to price in earnings expectations. The second is policy verification. The July Politburo meeting outlined the economic work for the second half of the year, and the market will now enter a phase of verifying the implementation and execution of specific policy measures. The third is external risk verification. The Fed's policy path remains a global market focus. These three verification windows in August form a progressive logic: mid-report earnings verification provides a fundamental anchor, determining the market's pricing anchor and structural direction; policy implementation provides macro support, affecting the scope and pace of recovery; and external risk verification provides external conditions for valuation recovery. All three clues will gradually become clearer. The strategy should be to maintain patience and balance, using earnings certainty as a spear and defensive assets as a shield. In the short term, structural market trends are expected to remain the main theme.
Zheshang Securities suggested that in terms of timing, medium-term positions should be held, awaiting a phased bottom of the mid-line rebound. Short-term positions can participate at lower levels during market pullbacks, but chasing highs after continuous short-term gains should be avoided. In terms of sectors, the first tier of sectors that have already emerged includes securities, innovative drugs, and the Hang Seng Tech Index. The second tier includes media, computers, non-ferrous metals, and state-owned enterprises. These can be focused on from a medium-term perspective at lower levels as alternative balancing options to technology. Meanwhile, short-term participation in the recent rebound of the ChiNext and STAR Market indices is possible from a contrarian perspective.
A research report from CITIC Securities pointed out that the market in early August is in a phase of oversold rebound, with the sectors that fell the most earlier showing the greatest elasticity. Currently, the year-to-date returns for non-ferrous metals, chemicals, non-bank financials, and new energy sectors are still below their theoretical midpoints. The report quantitatively assessed the repair progress of popular sectors from three perspectives: holding costs, margin unwinding, and congestion. From the holding cost perspective, unrealized losses are concentrated in tech growth and small-cap stocks, requiring further digestion. From the margin perspective, the unwinding process for the leading sectors in this rally is already halfway through. From the congestion perspective, the trading activity in the tech sector has not yet subsided. Overall, the repair progress is faster for electronics, non-ferrous metals, innovative drugs, and non-bank financials, while it is relatively slower for chemicals, new energy, and communications. In terms of allocation, tech holdings should continue to shift towards core assets, while non-tech holdings should increase allocations to energy and chemicals, non-ferrous metals, innovative drugs, and leading brokerages.
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