To The Moon

Market data from Zhitong Finance APP shows that on July 30, the Shanghai Composite Index opened 0.43% lower at 3,812.11 points, the Shenzhen Component Index opened 0.93% lower at 13,531.07 points, the ChiNext Index opened 1.40% lower at 3,331.32 points, and the STAR 50 Index opened 1.51% lower at 1,653.47 points. Across the two boards and the Beijing Stock Exchange, 1,076 stocks rose, 3,855 fell, and 603 were flat (source: Tencent Self-Selected Stocks, opening data). Leading the gains were gold, oil, non-ferrous metals, and coal, while electronics, electrical equipment, computers, machinery, and retail trade led the declines.

Market Overview

All three major indices opened lower, with the STAR 50 and ChiNext indices both falling over 1.4%, underperforming the Shanghai Composite. The US semiconductor sector experienced a significant decline overnight, with the Philadelphia Semiconductor Index falling for five consecutive days, directly pressuring China's technology stocks. The electronics sector opened down 1.32%, electrical equipment fell 1.02%, and computers dropped 0.86% (sector data source: Tencent Self-Selected Stocks, opening data). Defensive sectors were relatively resilient, with non-ferrous metals bucking the trend to open 0.50% higher, gold and oil sectors strengthening simultaneously, and coal edging up 0.03%. The beauty and personal care sector (under the Shenwan primary classification) also ranked among the top gainers. Less than 20% of stocks across the market rose, with 8 stocks hitting the daily upper limit and 4 hitting the lower limit (data source: Tencent Self-Selected Stocks, opening data), indicating weak profitability at the open.

Overnight Highlights

The Federal Reserve held interest rates steady, and US stocks fell significantly. On July 29, Eastern Time, the Fed maintained the federal funds rate at 3.50% to 3.75%, while three voting members supported a 25 basis point rate hike, widening the hawkish divergence. The Dow fell 2.19%, the Nasdaq fell 1.74%, and the S&P 500 fell 1.52%. According to reports, the 10-year US Treasury yield surged above 4.66%, and the Philadelphia Semiconductor Index dropped 5.33%.

The People's Bank of China announced a total of 2.1 trillion yuan in overnight reverse repurchase agreements. According to reports, the PBOC will conduct 600 billion yuan in overnight reverse repos daily from July 29 to 31, and another 300 billion yuan on August 3, totaling 2.1 trillion yuan (this is the total planned for multiple days from July 29 to August 3, not a single-day net injection). The PBOC, leading eight other departments, jointly issued a notice on technology finance data development and utilization, supporting the creation of digital credit profiles for tech enterprises and precise matching of financial resources.

Several leading companies intensively disclosed large-scale buyback and share increase plans. According to reports, on the evening of July 28, the chairman of Zhongji Innolight proposed a 4 billion to 8 billion yuan buyback, the controlling shareholder of BOE Technology Group plans to increase holdings by 500 million to 1 billion yuan, and the controlling shareholder of Hailiang Co. plans to increase holdings by 600 million to 1 billion yuan. On the evening of July 29, the chairman of GigaDevice Semiconductor proposed a 1 billion to 2 billion yuan cancellation buyback and plans to increase holdings by no less than 1 billion yuan.

Trading Outlook

Today, China's A-share three major indices all opened lower, with the STAR 50 and ChiNext indices leading the declines, opening 1.51% and 1.40% lower, respectively. The heavy sell-off in the US semiconductor sector overnight and the Fed's hawkish divergence pushing the 10-year US Treasury yield above 4.66% led to electronics and electrical equipment sectors leading the decline at the open, with less than 20% of stocks rising across the market. Domestically, the PBOC's announcement of a total of 2.1 trillion yuan in overnight reverse repos (600 billion yuan daily from July 29 to 31, and another 300 billion yuan on August 3) will support month-end liquidity. The intensive disclosure of large-scale buyback and share increase plans by several leading companies provides some support for market sentiment. Many institutional views suggest the market may maintain a volatile rebalancing pattern in the short term, with external disturbances to the tech theme not yet subsiding, and a rotation of lower-sector recoveries may continue.