China's A-share indices opened sharply higher on July 31, with the ChiNext Index briefly surging over 5% and the STAR 50 Index gaining more than 9% intraday, before paring gains in the afternoon session to close with a pullback from session highs. The Shanghai Composite Index ended at 3,832.26 points, up 0.72%; the Shenzhen Component Index finished at 13,578.93 points, adding 2.21%; the ChiNext Index closed at 3,343.96 points, rising 3.06%; the STAR 50 Index settled at 1,635.96 points, up 2.99%; and the Beijing Stock Exchange 50 Index closed at 1,083.27 points, gaining 3.26%. Total turnover on the Shanghai and Shenzhen exchanges reached approximately 2.54 trillion yuan, expanding by about 199.1 billion yuan from the previous session. Across the market, 4,691 stocks advanced, 728 declined, 101 hit the daily upside limit, and none fell to the daily floor, translating to a positive trading sentiment of roughly 86.5%.
Sector-wise, AI applications (Token Concept up 11.45%, Kimi Concept up 10.21%), information security, semiconductors, computing power leasing, robotics, and CPO optical communications led gains. Conversely, banking, coal, insurance, baijiu, and oil & petrochemical sectors declined against the broader market trend.
Driving the tech rally, the ChiNext Index briefly surged over 5% and the STAR 50 rose more than 9% intraday, tracking an 8.19% surge in the Philadelphia Semiconductor Index overnight. South Korea's Kospi jumped over 17% intraday, with SK Hynix gaining more than 28%, while Samsung Electronics' Q2 sales beat expectations with a 130% year-on-year increase.
Key Growth Areas
AI Applications Surge
AI application concepts broke out broadly, with the Token Concept Index rising 11.45% and the Kimi Concept Index gaining 10.21%. The AI Marketing Concept advanced 8.67%, and the Physical AI Concept rose 9.26%. Stocks including Zhongwen Online, Yidian Tianxia, BlueFocus, Kunlun Wanwei, and Rongxin Culture hit the 20% daily limit. The National Development and Reform Commission (NDRC) announced at a July 31 press conference that it would accelerate the legislative process for the AI law. Huachuang Securities research suggests that the performance improvement pace of domestic large models (from GLM-5.2 to Kimi K3) is exceeding expectations, equipping them with global frontier competitiveness.
Semiconductor and Computing Power
The semiconductor supply chain staged a collective rebound, with the sector index up 3.28%, comprising 168 gainers and 9 losers. Taiji Industry hit the daily limit, while GigaDevice, Demingli, and Puran Shares touched their daily highs intraday; Foxconn Industrial Internet rose over 6%. On the news front, Samsung Electronics' Q2 results significantly exceeded expectations, with management forecasting that generative AI will sustain a memory chip shortage through 2028 and planning to raise long-term contract sales to 60%-70%. Meanwhile, Amazon raised its annual capital expenditure guidance to $220 billion.
Information Security
The information security concept strengthened, with the sector index up over 5%. Yonyou Network hit the daily limit, Sangfor Technologies surged over 14% and touched the daily limit intraday, and Hehe Information and Hand Information both rose over 5%. The NDRC's July 31 press conference statement on accelerating AI law legislation fueled expectations for AI safety governance and domestic software substitution.
Declining Sectors
Banking, coal, insurance, baijiu, and oil & petrochemical sectors fell against the broader market. In banking, Agricultural Bank of China dropped over 5%, while Bank of China, Bank of Ningbo, Bank of Communications, Industrial and Commercial Bank of China (ICBC), and China Construction Bank all declined. In the coal sector, Antai Group fell over 7%, with the entire sector trading in the red. Insurance and baijiu sectors also showed weakness. Notably, these sectors had experienced significant gains recently, with banking giants ICBC and China Construction Bank both hitting record highs the previous day before falling out of favor on this session.
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