The market experienced a volatile session on August 24, with the ChiNext Index and the STAR 50 Index both plunging more than 4% at one point during the day before paring losses into the close. By the end of trading, the Shanghai Composite Index fell 0.59%, the Shenzhen Component Index dropped 2.13%, and the ChiNext Index declined 3.21%.
In terms of sector performance, gold-related concepts strengthened, coal stocks regained momentum, the agricultural sector remained robust throughout the day, and shipping stocks bucked the trend to trade higher. On the downside, computing hardware stocks saw widespread weakness, with nearly 4,000 stocks across the market ending in the red. Total trading volume on the Shanghai and Shenzhen exchanges reached 2.01 trillion yuan, up 128.2 billion yuan from the previous trading day.
As August draws to a close, the A-share market remains in a state where "the one who tied the bell must untie it." In plain terms, the major indices' sharp rally in the second quarter, the July pullback, and even the rebound in the first two weeks of August have all been deeply intertwined with the performance of heavyweight tech stocks. Even the Shanghai Composite Index, which has a relatively smaller tech weighting, cannot fully decouple from the broader rhythm of rebounds and corrections.
Looking ahead, if the market is to regain upward momentum in the short term, the tech sector remains the most capable of lifting the indices—but "capability" does not necessarily translate into "motivation," and occasionally the opposite occurs. For instance, today saw the simultaneous sharp declines of the so-called "Yi-Zhong-Tian" trio (referring to Eoptolink, Zhongji Innolight, and Tianfu Communication), with Zhongji Innolight's total market capitalization briefly falling below the 1 trillion yuan threshold during intraday trading. This weighed heavily on the entire computing hardware segment, dragging down a broad swath of tech stocks regardless of their specific names or concepts.
Some analysts suggest that the trigger for the sharp selloff in co-packaged optics (CPO) may be linked to SK Hynix's announcement of betting on next-generation CPO technology. On the other hand, Nvidia's declaration that CPO technology has officially entered the stage of large-scale mass production, along with its partner list drawing market attention, may have also shifted capital expectations.
As tech stocks weakened "actively" during the day, active capital was "forced" to seek safe havens. Coal, seed, major financial, and even baijiu sectors all saw localized strength today, with Kweichow Moutai Co.,Ltd. bucking the trend among thousand-yuan stocks and reclaiming the 1,300 yuan price level. However, strength in defensive sectors was insufficient to push the indices back into positive territory—a scene that should feel familiar to investors who have been closely monitoring the market recently.
That said, today's discussion is not focused on sector rotation, but rather on the broader trend. If the brief stabilization in the latter half of last week left the market with room to move in either direction in the short term, then today's decline has clarified one thing: the major indices have all returned to a state of "secondary bottom-testing."
On the Shanghai Composite Index front, the 3,884 level that we have repeatedly mentioned was marginally lost at the close, pulling the index back into the previous consolidation range. As for the ChiNext and STAR boards, both are approaching their early August lows. For the broader market represented by the Wind All-A Index, this marks the third retest action in over a month.
Precisely because the bottom, which has been tested twice, is not far below, we should not be overly pessimistic even after a single-day sharp decline. Aside from the "V-shaped" recovery seen in the late session, let me share two more layers of logic.
First, the market has entered the buying zone for "support capital." Taking the ChiNext ETF E Fund (159915) as an example, Wind data shows that the product saw net subscriptions exceeding 500 million units during today's session, corresponding to net capital inflows of over 1 billion yuan. (Note: Shenzhen-listed ETFs allow real-time subscription and redemption data visibility, while Shanghai-listed ETFs do not.) The ChiNext Index's decline correspondingly narrowed into the close. Previously, on July 17, July 20, and July 28-30, this product experienced two waves of large-scale net capital inflows, corresponding to two attempts at "bottom-fishing rebounds" (one failed, one succeeded). Last Wednesday (August 19), during the sharp decline, support capital had already made significant net subscription moves. While buying by support capital does not guarantee an immediate rebound, it clearly acts as "resistance" to further downside.
Second, as mentioned at the outset, "the one who tied the bell must untie it" is the clear logic at play. Discussing the market's trend cannot be separated from analyzing tech stock movements. Shenwan Hongyuan's strategy team believes that after the oversold rebound, AI industry disruptions have re-emerged, compounded by concerns over elevated US Treasury yields, leading to a secondary bottom-testing phase. The institution states that its short-to-medium-term view remains unchanged—the rebound may extend until late September, with steady policy implementation and the potential for concentrated optimism across long, medium, and short horizons possibly marking the high point of this rebound cycle.
"The positive capital cycle will struggle to quickly return to the state seen at the end of June, and AI chain new highs require fundamental expectations to surpass those of end-June. Compared to experience since 2025, the level of industry catalysts required to restart this round of the AI chain rally is higher, and the time needed is likely longer. Correspondingly, September will not see new highs, and there will be new adjustment waves. Subsequently, the market will expect the tech consolidation adjustment phase to lengthen, shifting from a monthly scale to a quarterly scale."
Further, the team judges that after September, the market may anticipate a longer adjustment period for tech. Correspondingly, the time for non-tech sectors to outperform will be extended; with more adjustment waves, high-dividend assets will have longer periods of absolute returns. In non-tech track sectors, innovative drugs and CXO are areas that have already demonstrated positive capital cycles. Consensus in precious metals is forming rapidly, which may also lead to positive capital cycles. Opportunities in industrial metals and basic chemicals deserve attention as well. In the medium term, with more adjustment waves, high-dividend assets may present repeated opportunities. "The CSI 800 Index weight minus the 26Q2 public fund holding weight may be an effective approach to identifying high-dividend assets, with a focus on banks, non-bank financials, food and beverage, and utilities."
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