On August 19, A-shares opened lower and extended losses through the afternoon session, with all three major indices suffering sharp declines. The STAR 50 Index led the drop with a 6.89% fall. By the close, the Shanghai Composite Index had declined 2.40% to 3,894.42 points, the Shenzhen Component Index fell 5.01% to 13,890.15 points, the ChiNext Index dropped 6.26% to 3,473.49 points, the STAR 50 slid 6.89% to 1,667.52 points, and the Beijing Stock Exchange 50 Index lost 4.90% to 1,082.19 points.
Total turnover on the Shanghai and Shenzhen exchanges reached approximately 2.511 trillion yuan, up about 110.27 billion yuan from the previous trading day. Across the market, only 449 stocks advanced while 5,069 declined, with 38 hitting the daily limit up and 130 hitting the daily limit down. Advancing stocks accounted for roughly 8% of all listed companies.
Where the market found support
In terms of sectors, several groups bucked the downtrend and closed higher, including coke (up 7.56%), kitchen and bathroom appliances (up 4.56%), oil refining and trading (up 2.08%), joint-stock banks (up 1.91%), city commercial banks (up 1.80%), and large state-owned banks (up 1.70%). On the downside, electronic chemicals (down 9.07%), electronic components (down 9.04%), glass and fiberglass (down 8.96%), communications equipment (down 8.66%), and semiconductors (down 7.57%) led the losses.
Additionally, Unitree Technology, dubbed the "first humanoid robot stock," made its debut on the STAR Market, surging 460.34% to close at 845.00 yuan, compared with its issue price of 150.80 yuan.
Key drivers behind the sell-off
Overnight, all three major U.S. indices closed lower, with the Dow down 0.22%, the S&P 500 down 0.69%, and the Nasdaq down 1.33%. The Philadelphia Semiconductor Index fell 4.98%, while memory chip makers SanDisk and Seagate Technology both dropped over 9%. The 30-year U.S. Treasury yield surged to 5.3%, its highest level since 2007, which brokerage China Securities Co., Ltd. noted exerts valuation pressure on high-growth sectors.
OpenAI reported second-quarter revenue of $6.7 billion, only modestly higher than the $5.7 billion in the first quarter, while losses widened further. Market concerns are growing that slowing revenue growth and expanding losses at major AI model developers could lead to reduced procurement of servers, optical communications equipment, and memory chips.
Asian-Pacific markets also tumbled, with South Korea's KOSPI index falling more than 5%, SK Hynix down over 9%, Samsung Electronics down over 7%, and Japan's Nikkei 225 down about 3%.
Sector highlights
1. Banking: The banking sector showed relative strength, with large state-owned banks up 1.70%, joint-stock banks up 1.91%, and city commercial banks up 1.80%. Agricultural Bank of China rose 2.58%, China CITIC Bank gained 4.48%, and Bank of Nanjing advanced 2.53%. On the news front, the net interest margin of commercial banks posted its first quarter-on-quarter increase in 17 quarters, suggesting a potential inflection point for industry margins.
2. Coal and Coke: The coke sector surged 7.56%, ranking first among Shenwan secondary industries. Baotailong, Dayou Energy, and Shaanxi Heimao all hit the daily limit up, while Huajin Resources climbed 9.98%. Rising international oil prices boosted the energy complex, with Brent crude breaking above $90 per barrel and PetroChina adding 2.66%.
3. Agricultural Planting: Agricultural stocks remained active, with Jinjian Miller and Jingliang Holdings hitting their daily limit up. Tianshan Bio jumped 12.19% and Zhongnong Fada Seed gained 5.16%. This follows JPMorgan's warning that the next global food crisis could erupt next year, compounded by the National Climate Center's forecast of a super El Ni帽o event forming this year.
Sectors under pressure
Technology and growth sectors, including semiconductors, communications equipment, electronic components, glass and fiberglass, and electronic chemicals, led the declines. In semiconductors, GigaDevice fell 7.56%, JCET Group dropped 8.99%, Taiji Industry lost 8.17%, and Hua Hong Semiconductor slid 11.92%. In communications equipment, Innolight declined 9.36% and Hengtong Optic-Electric fell 9.94%. In electronic components, Fenghua Advanced Technology dropped 9.99%. These segments had experienced significant gains in the prior period, and today's sharp pullback reflects a clear rotation among sectors.
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