At the close, the Shanghai Composite Index fell 0.16%, the Shenzhen Component Index dropped 1.02%, the ChiNext Index declined 1.32%, and the Beijing Stock Exchange 50 Index rose 1.34%. Total turnover across the three markets reached 2.0519 trillion yuan, down 93.4 billion yuan from the previous session. More than 3,300 stocks advanced. By sector, grain concepts, dairy, and short-drama gaming led gains, while electronic chemicals and components lagged.
On the index level, A-shares pulled back with shrinking volume, failing to break through the left-side resistance level; a volume-backed rally is needed to open further upside. The Shanghai Composite's intraday volatility widened notably today, with a rapid spike during the quiet midday session followed by a swift straight-line decline to close slightly lower. Although the gap between 3995.18 and 3995.81 points is within reach, the index has yet to achieve an effective breakout. Large-cap funds were seen defending the market, with banking and insurance heavyweights strengthening on a rotational basis, as Bank of China, China Construction Bank, Bank of Chengdu, and Bank of Jiangsu all hit record highs. However, even with sustained strength in heavyweight sectors, the index failed to follow through, a phenomenon that warrants caution for short-term trading.
From a technical standpoint, the Shanghai Composite is at a critical juncture: if it breaks above the prior rebound high of 3994.18 points with volume, upside room may open; otherwise, it could merely be forming a smaller, subordinate right shoulder. On the positive side, the correction lows from 3741 points, 3767 points, and 3850 points are trending higher. But confirmation of an uptrend requires both "higher highs" and "higher lows" to coexist, and the "higher high" has not yet emerged. Should the index rally on volume and break the left-side high in the near term, a more optimistic outlook for the index's trajectory would be justified.
At the sector level, agriculture and media have strengthened relatively, while tech remains under pressure, with risks of overseas sentiment transmitting to A-shares. Recently, long-term government bond yields in major developed economies have broadly risen, significantly compressing valuations of tech stocks that rely on discounted future cash flows. Last Friday, U.S. Federal Reserve Chair Warsh's remarks at the Jackson Hole conference briefly lifted sentiment, but long-term yields subsequently continued to climb, suggesting the market is not fully buying into the signal. According to reports, Lacy Hunt, dubbed the "commander of Wall Street's bond bulls," has turned bearish on long-term U.S. Treasuries after 40 years of being bullish. His firm, Hoisington Investment Management, has slashed the bond duration of client portfolios from roughly 21 years in September last year to under 1 year by June this year.
In this context, gold as a hedge against dollar credit deserves attention. CICC forecasts a reasonable range of $4,400–$4,600 per ounce, with current prices near the lower bound, offering relatively favorable risk-reward. After Monday's negative feedback, short-term selling pressure has largely been released, and gold prices show signs of a staged stabilization. The media sector has shown some continuity recently, drawing markedly higher market interest. We are closely tracking the B-end deployment of AI in media production; if commercialization progresses smoothly, it could succeed the previous code-domain applications as a new profit driver in the AI supply chain.
The agriculture sector has risen consecutively, driven primarily by firming prices in related commodities. Historically, agriculture has rarely been a major trend-leading sector, but this cycle differs somewhat. From precious metals to base metals, and then to energy chemicals and agricultural products, the current commodity cycle may be entering a phase of agricultural price increases, raising the possibility that the agricultural sector could sustain a more extended rally. [Note: Market risk exists, and investment requires caution. Under no circumstances does the information or opinions expressed in this subscription account constitute investment advice to anyone. Except where specifically noted, research data in this article is supported by Tonghuashun iFinD.]
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