The Shanghai Composite Index ended higher on August 10, marking its fifth consecutive daily gain, while the ChiNext Index reversed a steep intraday decline in late trading. The market displayed a clear divergence between the Shanghai and Shenzhen exchanges, with a broad rally in individual stocks.
Ping An Bank Co.,Ltd. and other major financial shares contributed to the upward momentum. The Shanghai Composite Index rose 0.67% to close at 3,966.59 points. The Shenzhen Component Index edged up 0.04% to 14,316.96 points, while the ChiNext Index fell 0.73% to 3,537.21 points. The STAR 50 Index declined 0.36%, and the Beijing Stock Exchange 50 Index dropped 1.00%. Total trading volume on the Shanghai and Shenzhen markets reached 2.5231 trillion yuan, a decrease of 141.317 billion yuan from the previous session.
Across the market, 4,068 stocks advanced, 1,391 declined, and 103 hit their daily upper limit, while only 5 hit their lower limit. The number of advancing stocks represented 73.8% of the total. Leading sectors included ground military equipment (+5.12%), medical services (+3.92%), precious metals (+3.89%), energy metals (+3.46%), baijiu (+2.70%), aquaculture (+4.19%), and hotels and restaurants (+4.22%). On the downside, communication equipment (-3.67%), CPO concepts, electronic components (-1.25%), and glass and fiberglass (-1.04%) were among the weakest performers.
The healthcare sector experienced a broad-based surge, directly catalyzed by Applied Optoelectronics' announcement on August 9 that a U.S. court had approved a preliminary injunction motion, protecting it from adverse effects during the challenge of a 1260H list designation. This was compounded by the company's interim report showing a 38.9% year-on-year revenue increase, its first-ever net profit attributable to shareholders exceeding 10 billion yuan, and an upward revision of its full-year guidance. The defense sector strengthened, driven by institutional research reports forecasting an orderly rollout of the 15th Five-Year Plan and military trade orders, which could lead to sustainable earnings recovery, with fund holdings at historical lows. Non-ferrous metals, including precious metals, energy metals, and minor metals, rallied collectively on news that the Democratic Republic of Congo had signed a ministerial decree banning the export of copper and cobalt concentrates, exacerbating supply shortages. This was further supported by weaker-than-expected U.S. July non-farm payroll data, which cooled rate hike expectations, alongside a $3 billion key minerals investment plan announced by former President Trump, and a 94% year-on-year increase in the non-ferrous metal industry's profit for the first half of 2026. The consumer sector continued its strong run, with July CPI rising 0.5% year-on-year and Ping An Bank Co.,Ltd. raising the retail price of its Feitian Moutai to 1,753 yuan per bottle. In the film and theater sub-sector, the 2026 summer box office has already exceeded 8.5 billion yuan, boosted by strong word-of-mouth for Shen Teng's new film. Conversely, CPO and communication equipment sectors were among the worst performers, pressured by Applied Optoelectronics' (AAOI) announcement during its earnings call that it plans to expand production capacity more than tenfold over the next two years, and rumors that the FCC intends to restrict imports of Chinese data center components.
Healthcare Sector
The innovative drug and CRO (Contract Research Organization) segments saw a comprehensive surge. Several stocks, including Baihua Pharmaceutical, achieved their fifth consecutive daily limit-up, while others like Ha Sanlian, Harbin Pharmaceutical, and Zhejiang Hisun Pharmaceutical recorded two consecutive daily gains. A large number of other stocks, including Berry Genomics, Kingmed Diagnostics, and Realcan Pharmaceutical, also hit their daily upper limits. The key catalyst was Applied Optoelectronics' announcement of the U.S. court's preliminary injunction ruling, which is seen as a temporary victory in its legal battle. Analysts view this as a significant step in the company's efforts to defend its operations in the U.S.
Defense and Non-Ferrous Metals
The defense sector strengthened in the afternoon, with stocks like Changcheng JunGong and Hongdu Aviation hitting their daily limit-up. Northern Longsheng rose over 14%, and other companies also posted significant gains. In the non-ferrous metals space, several stocks, including Xianglu Tungsten and Huayu Mining, also hit their daily limit-up. The rally was supported by news that Zhangyuan Tungsten raised its long-term contract purchase prices for the first half of August. Institutional reports from CITIC Securities and Essence Securities highlighted the positive outlook for 'computing metals' and 'defense metals' amid accelerating AI infrastructure build-out and overseas military replenishment, and suggested that macro headwinds on gold, silver, copper, and tin have eased, recommending increased allocation to these metals.
Consumer Staples and AI Applications
The food and beverage sector moved higher, with Yiming Food, Baiyang, and Xiangpiaopiao hitting their daily limit-up. Yingjia Distillery gained over 8%. In the film and theater sub-sector, indices have rallied nearly 15% since July 27, with stocks like Ruyi Film and Beijing Culture also hitting their limit-up. The AI application sector saw an intraday surge, with companies like Shiji Information and Rongji Software hitting their daily limit-up. In the power grid equipment sector, stocks like Zhongdian Xinlong, Jingquanhua, and Sanbian Tech also reached their daily limit-up.
Weaker Sectors
The communication equipment, CPO, and electronic components sectors were among the weakest, declining by 3.67%, 1.25%, and 1.04% respectively. In the CPO segment, several major stocks fell sharply, including Accelink Technologies, which fell over 9% and briefly touched the daily limit-down. Zhongji Innolight fell over 6%, and Eoptolink Technology fell over 5%. The decline was attributed to Applied Optoelectronics' (AAOI) aggressive expansion plans and the FCC rumor. Analysts at Guojin Securities noted that the adjustment is a correction in supply expectations rather than a collapse in demand, as the willingness of overseas manufacturers to significantly expand capacity itself indicates that industry sentiment remains strong. These sectors had experienced significant gains prior to August 10, leading to profit-taking.
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