The market experienced a sharp decline in the afternoon session, led lower by technology stocks, with trading volume contracting once again. Synthesizing market news, three key factors may be influencing the market: Firstly, a sudden afternoon slump in South Korean stocks dragged down broader Asia-Pacific markets. The South Korean KOSPI index closed up 49.75 points, or 0.74%, after surging over 6% earlier in the day. Secondly, following a strong one-sided rally the previous day, a significant amount of short-term profit-taking pressure had built up, creating a strong technical need for a correction and consolidation. Thirdly, a major reshuffle in the latest top ten holdings list for public funds triggered market sentiment fluctuations. Zhongji Innolight held the top spot, while tech stocks like Sunny Optical and Dongshan Precision Manufacturing surged onto the list. The technology sector had accumulated substantial paper gains in the first half of the year, and the data disclosure prompted a reaction.
On the market, technology stocks weakened significantly in the afternoon. The memory chip concept retreated, with Demingli hitting its sixth跌停 limit in eight days, while Jiangbolong and Baiwei Storage followed lower. The CPO (co-packaged optics) concept weakened, with Zhongji Innolight and Sunny Optical pulling back. The humanoid robotics concept declined across the board, with Jinghua New Materials falling by the跌停 limit. On the upside, oil and precious metals led the gains. Additionally, funds flowed back into traditional sectors, with coal, power, and banking stocks showing resilience against the broader decline.
Looking at individual stocks, 1,530 rose, 3,876 fell, and 124 were flat across the two exchanges. A total of 48 stocks hit their upper daily limit, while 10 hit their lower limit. At the close, the Shanghai Composite Index rose 0.07% to 3,867.03 points, with a turnover of 1.2582 trillion yuan. The Shenzhen Component Index fell 1.42% to 14,061.44 points, with a turnover of 1.3832 trillion yuan. The ChiNext Index dropped 3.23% to 3,566.73 points. Looking ahead, analyst Liu Chenming from Gf Securities Co.,Ltd. stated that the downside for A-shares is limited and AI is far from being in a bubble.
Capital Flows
Today, major funds focused on buying into sectors like industrial metals, semiconductors, power, precious metals, and photovoltaic equipment. Net outflows were seen in communications equipment, optoelectronics, glass fiber, components, and batteries.
Key News Recap
1. Apple iPhone 18 Series Enters Mass Production
On July 22, industry sources indicated that Apple's iPhone 18 series has entered mass production in July and is in the production ramp-up phase. Reportedly, Apple's assembly partner Foxconn has entered its peak recruitment period.
2. South Korea's KOSPI Gains 0.7% After Surging Over 6% Earlier
Japan's Nikkei 225 index closed down 116.59 points, or 0.18%, at 66,115.60 points on Wednesday, July 22. South Korea's KOSPI index closed up 49.75 points, or 0.74%, at 6,797.7 points on the same day, after jumping over 6% in the morning session. SK Hynix fell 0.32%, while Samsung Electronics gained 0.57%.
3. Unitree Robotics' Wang Xingxing: Embodied AI's "ChatGPT Moment" Could Arrive in 2-3 Years
Wang Xingxing, founder and CEO of Unitree Robotics, spoke at the opening ceremony of the 2026 World Internet Conference Digital Silk Road Development Forum in Xi'an, Shaanxi on July 22. He noted rapid progress in humanoid robots from walking to dancing, kung fu fighting, and simple services in recent years. Wang believes embodied AI's "ChatGPT moment" could arrive within two to three years, enabling robots to perform basic functions in most unfamiliar scenarios. He advised stakeholders to plan accordingly to seize new opportunities in the intelligent era.
4. China's First Quantitative Hyperspectral AI Computing Satellite Successfully Enters Orbit
At 10:54 on July 22, 2026, China's first quantitative hyperspectral AI computing satellite, "Xiguang No.2 01 (Caiyun Hyperspectral 01)," developed independently by Xi'an Zhongke Xiguang Aerospace Technology Group, was successfully launched into orbit aboard a Gravity-1 Y4 carrier rocket from the East China Sea. This satellite is the first deeply customized for the Yunnan Provincial Bureau of Geology and Mineral Exploration and Development, and the first hyperspectral satellite for Yunnan's "Caiyun Constellation." It is also the first AI computing satellite integrating breakthroughs in quantitative hyperspectral remote sensing technology and real-time on-orbit intelligent processing following a strategic cooperation between Zhongke Xiguang Aerospace and Zhejiang Lab.
Market Outlook Analysis
1. Huaxi Securities Co.,Ltd.: Technical Conditions Favor a Rebound
Huaxi Securities Co.,Ltd. stated that from a market operation perspective, this round of correction essentially represents a healthy technical retracement following the previous rapid rally. Since April 2026, the technology theme has been strong, with valuations in some segments rising quickly, creating an inherent need for valuation normalization and position rotation. After recent consecutive adjustments, accumulated profit-taking pressure has been partially digested, and short-term irrational selling pressure has been released to some extent. Conditions for a market rebound are gradually maturing. Valuation-wise, major broad-based indices have fallen to relatively low levels for the year, significantly improving their margin of safety. Liquidity-wise, market leverage risks have been effectively cleared, with margin financing balances declining notably. Meanwhile, mainstream broad-based ETFs have seen continued fund inflows at lower levels, indicating growing recognition of current valuations by medium- to long-term capital. As market crowding eases and trading structures rebalance, technical conditions have opened up space for a rebound.
2. Gf Securities Co.,Ltd.'s Liu Chenming: Limited Downside for A-Shares, AI Far From Bubble Territory
Liu Chenming, chief strategy analyst at Gf Securities Co.,Ltd., stated that this A-share market correction is primarily driven by external, imported factors, representing a sentiment and liquidity shock. The core pricing factors are internal and external liquidity shocks, not a directional reversal in domestic fundamentals or industry trends. Based on three judgments—"the AI industry trend continues," "the adjustment has been substantial," and "ETF incremental fund signals are clear"—Liu believes the second key turning point of 2026 is approaching, with rebound conditions gradually maturing.
3. Citic Securities Company Limited: Dividend Assets May Enter a Valuation Recovery Phase in H2 2026
A research report from Citic Securities Company Limited noted that in the first half of 2026, impacted by geopolitical tensions, liquidity tightening, and other factors, major asset classes exhibited significant high divergence and high volatility characteristics. Looking to the second half of 2026, dividend assets are expected to enter a phase of valuation recovery. Gold is anticipated to consolidate in the short term but has long-term structural support. Style-neutral portfolios within active equity funds may benefit. Quantitative funds' alpha returns may improve. Absolute-return "fixed-income plus" funds are expected to be more adaptable in a divergent market. The impact of liquidity shocks on macro allocation strategies is likely to diminish. Subjective CTA strategies are projected to hold an advantage.
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