The three major A-share indices collectively weakened today (August 19), with the Shanghai Composite Index falling 2.40% to close at 3,894.42 points, breaching the 3,900-point mark. The Shenzhen Component Index dropped 5.01%, while the ChiNext Index tumbled 6.26%, with total turnover across the Shanghai, Shenzhen, and Beijing exchanges reaching 2.53 trillion yuan.
Most industry sectors declined, yet banks stood out as a defensive shield, with 40 of 42 banking stocks closing in positive territory. The food and beverage sector demonstrated resilience, as baijiu giant Kweichow Moutai Co., Ltd. (SH: 600519) bucked the downtrend to close higher. On the downside, technology stocks weakened broadly, with computing hardware shares falling across the board and optical module leaders experiencing sharp corrections, as Zhongji Innolight Co.,Ltd. (SZ: 300308) and Eoptolink Technology Inc.,Ltd. (SZ: 300502) led declines of over 9%.
Where the market stands now
Zhongtai Securities noted that the technology sector may still see further pullbacks, though the magnitude is likely limited. On the industry front, Anthropic's revenue performance continues to significantly exceed expectations, while the overseas new model Grok 4.6 has delivered outstanding results in third-party evaluations with leading cost-performance. These factors signal bullish signals for the AI cycle. Therefore, mid-to-late August is more likely to witness a strong pullback rather than a trend reversal.
Huaxin Securities indicated that the transition from policy bottom to market bottom typically forms a W-shaped pattern, and whether a second dip occurs depends on whether core contradictions are resolved. Currently, global risk appetite is marginally improving, industry concerns are structurally easing, and deleveraging is largely complete, keeping overall risks manageable. The market may experience pullbacks and consolidation, but the risk of breaking below previous lows is relatively low.
Banking sector fights back as Jiangsu Bank hits record high
Commercial banks' net interest margin rose quarter-on-quarter for the first time in four years, prompting main capital to swiftly flow into the banking sector. Banks once again acted as a defensive force, with 40 of 42 banking stocks closing in positive territory. Bank Of Jiangsu Co.,Ltd. (SH: 600919) hit a new all-time high against the market trend, while China CITIC Bank Corporation Ltd. (SH: 601998) led gains with a 4% rise. More than ten stocks including Agricultural Bank of China Limited (SH: 601288), Bank of Nanjing Co., Ltd. (SH: 601009), China Merchants Bank Co., Ltd. (SH: 600036), and Bank of Communications Co., Ltd. (SH: 601328) advanced by 2% or more. The Bank ETF Huabao (512800) subsequently strengthened as well.
According to the latest data released by the National Financial Regulatory Administration, the net interest margin of commercial banks stood at 1.41% as of the end of Q2 2026, up 1 basis point quarter-on-quarter. This marks the first single-quarter positive growth since Q1 2022, signaling a stabilizing and improving fundamental outlook.
From a market style perspective, the ChiNext and STAR market led the market's deep correction today, while banks strengthened against the trend due to the "seesaw effect" with technology. Main capital inflows into the banking sector reached 2.241 billion yuan in a single day, ranking first among all 31 Shenwan primary industries. Historically, the correlation between banks and technology ranks at the bottom among all industries. Over the past 1, 3, and 5 years, the daily return correlation between banks and the Wind Tech Index (888012.WI) was only -0.37, 0.01, and 0.16 respectively (as of August 19, 2026), ranking near the bottom across all industries, making banks an important direction for balanced allocation in the current market environment.
Oriental Securities stated that since Q3, amid the rebalancing of market risk appetite and capital style, the market has entered a window of style rebalancing. With banks' mid-year report fundamentals expected to remain stable and showing definitive improvement compared to the past three years, coupled with high-dividend defensive characteristics, the sector is expected to maintain its current valuation recovery trend.
Zheshang Securities also believes that the banking sector is entering a golden allocation window where win rate and odds resonate in the second half of the year. Under the long-term macro backdrop of low interest rates and asset scarcity, bank stocks possess both "bond-like attributes" and "positive options for economic recovery," making them scarce assets worthy of close attention.
The Bank ETF Huabao (512800) and its feeder funds (A-class: 240019; C-class: 006697) passively track the CSI Banks Index, comprising all 42 A-share listed banks, serving as an efficient investment tool for tracking the overall banking sector performance.
Food and beverage resilience shines with new product launch
The food and beverage sector demonstrated notable resilience today, with baijiu leader Kweichow Moutai Co., Ltd. (SH: 600519) closing higher against the market trend. Several consumer staples also performed well, with Yangyuan Zhi Hui Beverage Co., Ltd. (SH: 603156) rising 1.62% by the close, while Shanghai Milkground Food Tech Co., Ltd. (SH: 600882), Chengde Lolo Co., Ltd. (SH: 000848), and Inner Mongolia Yili Industrial Group Co., Ltd. (SH: 600887) all closed higher collectively.
On the news front, Moutai Health Wine released its new product today. According to the company's WeChat official account, the Weishu Lemon Mint new product was launched on August 19. The product specification is 27% vol, 105mL per bottle. Analysts suggest that Moutai Health Wine's launch of a low-alcohol flavored product improves its younger consumer product matrix, carrying positive significance for the company's expansion into niche segments. This reflects the baijiu sector's accelerated exploration of the low-alcohol flavored wine blue ocean, catering to new-generation consumption trends, as traditional liquor companies seek new growth engines through category innovation.
From a valuation perspective, the food and beverage sector remains at low valuation levels. Data shows that as of yesterday's close (August 18), the CSI Sub-Food & Beverage Index tracked by the Food & Beverage ETF Huabao (515710) had a P/E ratio of 20.33 times, positioned at a low 11.35th percentile over the past decade (data source: Wind), highlighting its medium-to-long-term allocation value.
Looking ahead, Oriental Securities stated that combined with recent macro data, market data support for the "K-shaped divergence convergence" in domestic demand is gradually fading. The previous valuation recovery in food and beverage has been quite significant. As the sector enters the earnings reporting period, the food and beverage mainline returns to marginal improvement and earnings certainty: (1) Benefiting from demand-side improvement and easing cost pressures, segments with potential for marginal earnings improvement include beverages and leisure foods; (2) Leading companies leveraging competitive advantages to gradually gain market share with earnings certainty include dairy and condiments.
Shendong Securities pointed out that interim reports may continue to reflect fundamental pressure. Baijiu, as an important sub-sector of consumer staples, has prominent allocation value. At current price levels, sector performance may stabilize and recover ahead of fundamentals. It is recommended to focus on interim report expectation improvements under the base effect, prioritizing structural opportunities in baijiu from the perspectives of channel clearance, operational improvement, scenario continuity, and dividend yield.
The Food & Beverage ETF Huabao (515710) tracks the CSI Sub-Food & Beverage Industry Theme Index, with baijiu leaders accounting for nearly 50% of holdings. Off-market investors can also allocate to core consumer assets through the Food & Beverage ETF feeder funds (A-class 012548, C-class 012549).
Who is quietly selling? Optical module leaders plunge sharply
Computing hardware stocks fell broadly, with optical module leaders experiencing sharp corrections. Zhongji Innolight Co.,Ltd. (SZ: 300308) and Eoptolink Technology Inc.,Ltd. (SZ: 300502) led declines of over 9%. Three major factors may explain today's selling pressure:
First, overseas tech stock collapse dragged on sentiment, as US tech sectors suffered broad declines overnight, with semiconductor, storage, and optical communications leaders plunging collectively, directly impacting comparable A-share sectors. Second, surging US Treasury yields weighed heavily on tech valuations, with the 30-year Treasury yield reaching its highest level since 2007, intensifying global risk-off sentiment and prompting capital rotation from tech into safe-haven assets like banks and gold. Third, trading-level selling pressure emerged, as sectors like storage had dense trapped positions from earlier periods, and recent rebounds triggered profit-taking and exit selling; meanwhile, some funds had positioned ahead of popular company IPOs and exited today after the positive catalyst materialized.
Looking ahead after the sharp pullback, Cao Xuchen, fund manager of the ChiNext AI ETF Huabao (159363), stated that the recent volatility in the computing power sector can be viewed as a technical pullback, with medium-to-long-term logic unchanged. Overseas news triggered market turbulence, but the adjustment reflects excessive gains from prior advances rather than fundamental deterioration. Going forward, leaders with fundamental support are expected to continue attracting capital attention. In the current structural recovery, sectors with volume growth, low valuations, and solid fundamentals offer greater sustainability, while price-hike beneficiaries have limited support.
Mapping to the A-share market, Cao noted that the technology sector experienced a clear B-wave rebound in early August, with small and mid-cap stocks showing greater elasticity amid FCC-related matters affecting some companies. Looking toward the post-pullback direction, computing chips, optical modules, and servers with "volume growth" and "valuation advantages" are expected to become primary sources of quality alpha, with attention on directions with solid fundamentals and strong earnings certainty.
The ChiNext AI ETF Huabao (159363) and its feeder funds (A-class 023407, C-class 023408) track the ChiNext AI Index, which focuses on optical module CPO leaders while also covering AI applications, capturing opportunities from the AI mainline's explosive growth.
Risk disclosure: The Food & Beverage ETF Huabao passively tracks the CSI Sub-Food & Beverage Industry Theme Index (base date December 31, 2004; published April 11, 2012). The ChiNext AI ETF Huabao and its feeder funds passively track the ChiNext AI Index (base date December 28, 2018; published July 11, 2024). The Bank ETF Huabao passively tracks the CSI Banks Index (base date December 31, 2004; published July 15, 2013). The ChiNext AI Index annual returns for 2021-2025 were: 17.57%, -34.52%, 47.83%, 38.44%, and 106.35% respectively, with annualized volatility of 23.73%, 27.34%, 38.02%, 45.42%, and 41.1% over the same period. The Sub-Food & Beverage Index returns for the past five complete years were: 2025: -11.63%; 2024: -6.12%; 2023: -19.84%; 2022: -15.27%; 2021: -8.3%, with volatility of 13.51%, 37.1%, 20.98%, 29.22%, and 34.04% respectively. The CSI Banks Index returns for the past five complete years were: 2025: 6.79%; 2024: 34.71%; 2023: -7.27%; 2022: -8.78%; 2021: -4.41%, with volatility of 14.03%, 19.34%, 13.41%, 18.56%, and 18.63% respectively. Index constituent stocks are adjusted periodically according to index methodology, and backtested historical performance does not indicate future index performance. Stocks mentioned herein are solely objective displays of index constituents and do not constitute stock recommendations or represent fund manager or fund investment directions. Any information appearing in this article (including but not limited to stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors must bear responsibility for their own independent investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice of any form to readers, and the company assumes no liability for direct or indirect losses arising from the use of this content. Investors should carefully read fund legal documents including the Fund Contract, Prospectus, and Fund Product Information Summary to understand the risk-return characteristics and select products matching their risk tolerance. Past fund performance does not indicate future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of fund performance. According to the fund manager's assessment, the Bank ETF Huabao and Food & Beverage ETF Huabao are rated R3-medium risk, suitable for balanced (C3) and above investors; the ChiNext AI ETF Huabao is rated R4-medium-high risk, suitable for aggressive (C4) and above investors. Suitability matching opinions are subject to sales institution confirmation. Sales institutions (including fund manager direct sales and other sales institutions) conduct risk assessments on the above funds according to relevant laws and regulations. Investors should promptly pay attention to suitability opinions issued by the fund manager. Suitability opinions from various sales institutions may not necessarily be consistent, and fund product risk ratings issued by fund sales institutions shall not be lower than those issued by the fund manager. Differences exist between risk-return characteristics in fund contracts and fund risk ratings due to different considerations. Investors should understand fund risk-return conditions, carefully select fund products based on their investment objectives, time horizons, investment experience, and risk tolerance, and bear risks themselves. CSRC registration of the above funds does not indicate substantive judgment or guarantee of their investment value, market prospects, or returns. Fund investment requires caution.
Comments