Daily Perspective
Today, the three major Shanghai and Shenzhen indices declined, with the Shenzhen Component Index and the ChiNext Index both falling over 2%. Trading volume on both exchanges continued to shrink, dropping below 2 trillion yuan. Among the Shenwan primary industries, only the banking sector posted gains. Today, external shocks exerted dual pressure. The situation in the Middle East escalated sharply, pushing international oil prices above $100 per barrel. At the same time, the yield on the 10-year U.S. Treasury note rose to approximately 4.7%, hitting a new high since January. Additionally, a new U.S. tariff framework was finalized, announcing additional tariffs of 10% to 12.5% on dozens of countries and regions, replacing the global temporary tariff. Recently, domestic market stability forces have been actively voicing their stance, emphasizing counter-cyclical adjustments and the inflow of medium- to long-term capital. The previously crowded trading sectors have also seen some relief. Looking ahead, short-term volatility is likely to remain elevated, with key focus on the policy direction from the Politburo meeting at the end of the month and the evolving situation in the Middle East. In the medium term, after the external negatives are digested, the market is expected to return to fundamentals-driven structural opportunities. Technology growth and dividend-paying sectors may rotate, making a balanced allocation a preferred strategy.
Market News
On July 23, according to the Ministry of Commerce, the economic and trade teams of China and the U.S. are maintaining close communication on specific arrangements regarding the structure, functions, and operational model of the Trade Council. They are also exploring a framework for reciprocal tariff reductions of $30 billion each. China is widely soliciting opinions on the proposed tariff reduction arrangements, while the U.S. is also seeking input on the Trade Council and reciprocal tariff reductions. Both sides will work to finalize specific product tariff reduction arrangements and implement them as soon as possible.
Commentary: The simultaneous launch of stakeholder consultations by both China and the U.S. indicates that tariff reductions have moved from "agreement in principle" to the technical phase of "list negotiations." The establishment of a dual-track mechanism for the Trade Council and the Investment Council aims to shift China-U.S. economic and trade consultations from "crisis-driven responses" to "institutionalized management," which could help reduce the unpredictability of bilateral trade frictions. If tariff reduction expectations gradually materialize, it could boost expectations for export-oriented sectors such as consumer electronics, furniture, home appliances, and light manufacturing. The subsequent negotiation over specific product lists will be a key variable.
On July 23, 2026, local time, the U.S. Trade Representative's office issued a notice announcing the imposition of new tariffs of 10% or 12.5% on 60 trading partners, citing "forced labor" under Section 301 of the Trade Act of 1974. The new tariffs took effect at 12:01 AM Eastern Time on July 24, replacing the 10% global temporary import tariff that expired that day. The tariff action involves economies that are among the U.S.'s top 60 trading partners, accounting for 99.4% of total U.S. imports.
Commentary: After the Supreme Court ruled tariffs imposed under the International Emergency Economic Powers Act unconstitutional, the U.S. quickly pivoted to the more legally robust Section 301 to achieve a "seamless transition" of tariff measures. This action, covering 99.4% of U.S. import trade volume, demonstrates the breadth of its scope and the speed of its implementation, indicating that unilateral tariff tools have been deeply embedded in U.S. trade policy. For China, being placed in the highest 12.5% tariff category, combined with existing tariffs, further raises the comprehensive tariff costs for export companies. This could create periodic disruptions in expectations for export-related supply chain industries. However, with ongoing China-U.S. economic and trade consultations, the actual impact of the new tariffs may be partially offset by subsequent negotiation outcomes.
On July 23, the People's Bank of China (PBOC) announced a 500 billion yuan Medium-term Lending Facility (MLF) operation with a one-year term, conducted on July 24 via a fixed-quantity, interest rate bidding, and multiple-price award method to maintain ample liquidity in the banking system. With 400 billion yuan in MLF maturing on July 27, this operation results in a net injection of 100 billion yuan. This marks the third consecutive month that the PBOC has increased its MLF operations.
Commentary: Combined with the 700 billion yuan net injection from two tenors of reverse repos in July, the central bank's medium-term liquidity operations for the month total a net injection of 800 billion yuan, reversing the previous trend of four consecutive months of contraction. The central bank's increased supply helps prevent market interest rates from rising excessively. The ample injection of medium-term liquidity helps stabilize the market valuation benchmark and supports sectors sensitive to funding costs, such as technology growth stocks.
Market Recap
On July 24, the three major A-share indices declined. At the close, the Shanghai Composite Index stood at 3814.20 points, down 1.61%; the Shenzhen Component Index was at 13774.68 points, down 2.47%; the ChiNext Index closed at 3480.87 points, down 2.65%; and the STAR 100 index was at 1748.56 points, down 1.44%. Among the Shenwan primary industries, only the banking sector rose, gaining 0.31%. Non-ferrous metals, comprehensive, and beauty & personal care sectors saw the steepest declines, falling 4.71%, 4.49%, and 3.83%, respectively. A total of 555 stocks advanced, while 4,940 stocks declined.
Capital Flow Tracking
Market turnover was 1,944.678 billion yuan, down from the previous trading day. Margin trading and short-selling balances stood at 2,710.313 billion yuan as of yesterday, also lower than the prior session.
Data source: Flush, as of July 24, 2026. Funds carry risks, and investment requires caution. Fund managers are committed to managing fund assets with integrity, diligence, and responsibility, but do not guarantee profitability or returns. Past performance does not predict future results.
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