To The Moon

On July 21st, the A-share market experienced another round of adjustments. The three major indices opened lower and all fell by more than 1% in early trading. Technology stocks, including those in computing hardware and semiconductors, continued their decline, dragging the STAR 50 Index down by over 3%. Sectors such as optical modules, optical communication, and circuit boards were among the biggest decliners. Conversely, large financials, automobiles, and liquor stocks showed strength against the broader market trend.

The Hong Kong market fluctuated with gains. The Hang Seng Index and the Hang Seng TECH Index edged higher at the open. Most technology and internet stocks advanced, while chip stocks declined. AI large model stocks rebounded, with Zhipu AI surging 7%. In the bond market, treasury bond futures mostly rose. In commodities, domestic futures were mostly lower, with lithium carbonate dropping over 6%. The core market movements are as follows:

A-Shares: As of writing, the Shanghai Composite Index fell 1.11%, the Shenzhen Component Index dropped 1.38%, and the ChiNext Index declined 1.44%.

Hong Kong Shares: As of writing, the Hang Seng Index rose 0.15%, and the Hang Seng TECH Index gained 0.51%.

Bond Market: Treasury bond futures fluctuated with gains. As of writing, the 30-year main contract fell 0.02%, the 10-year main contract rose 0.01%, the 5-year main contract gained 0.02%, and the 2-year main contract increased 0.01%.

Commodities: Domestic commodity futures were broadly lower. As of writing, Shanghai silver, soybean meal, and the containerized freight index rose over 1%. A few varieties, including Shanghai copper, palladium, pulp, alumina, Shanghai gold, and stainless steel, moved higher. Shanghai tin, platinum, caustic soda, glass, Shanghai nickel, Shanghai aluminum, rapeseed, polysilicon, asphalt, industrial silicon, crude oil, and hot-rolled coil all declined. Manganese silicon, rebar, rubber, fuel oil, and iron ore all fell over 1%. Eggs, coke, and coking coal dropped over 2%, while lithium carbonate plunged more than 6%.

Key Market Developments

At 09:58, the optical fiber concept weakened in early trading. Yangtze Optical Fibre and Cable Joint Stock Limited Company and Tongding Interconnection Information Co., Ltd. hit the daily limit-down. Changyingtong fell over 10%. Jiangsu Etern Co., Ltd., Hengtong Optic-Electric Co., Ltd., Shenzhen Tellus Holding Co.,Ltd, and Zhongtian Technology Co., Ltd. were among the top decliners.

At 09:50, the semiconductor materials sector continued to adjust. Gritek briefly touched the 20% limit-down, following a four-day limit-down streak for Grinda. Zhengguang Co., Ltd. and CSSC Special Gas Co., Ltd. fell over 10%. Hubei Heyuan Gas Co., Ltd. and Guangdong Huate Gas Co., Ltd. were also among the leading losers.

At 09:43, the computing power leasing concept initially dipped then rebounded in early trading. Zhongjia Bocai marked its third limit-up in five days. Meili Cloud Computing had previously hit two consecutive limit-ups. Litong Electronics, Yangdian Technology, Yitong Century, and Hangzhou Iron & Steel Co., Ltd. followed with gains.

Catalysts emerged in the computing power sector. Kimi paused new consumer subscriptions due to computing power shortages, while Meta reportedly plans to lease computing power to Anthropic in a deal valued up to $10 billion. Additionally, the Ministry of Industry and Information Technology stated it will issue guidelines for a computing power standard system, promoting standards for service capability evaluation and market-based pricing of computing power.

At 09:36, the ChiNext Index surged over 1%. Precious metals and digital currency sectors led the gains, with nearly 2,200 stocks rising across the Shanghai, Shenzhen, and Beijing exchanges.

At 09:34, the Hang Seng TECH Index expanded its gains to 1%.

At 09:34, the power sector tumbled in early trading. Hunan Development Group Co., Ltd. and Hangzhou Thermal Power Plant Co., Ltd. hit the daily limit-down. Shennan Circuits Co., Ltd., Guiguan Electric Power Co., Ltd., and Ningbo Energy Group Co., Ltd. followed the decline.

At 09:26, the Shanghai Composite Index opened up 0.42%, and the ChiNext Index opened up 0.76%. The semiconductor industry chain rebounded, with ASIC chips, glass fiber, advanced packaging, and memory sectors leading the gains. Precious metals and construction machinery sectors showed strong performance. Oil and gas extraction and copper-clad laminate concepts were among the top decliners.

At 09:21, the Hang Seng Index opened up 0.03%, and the Hang Seng TECH Index opened up 0.07%. Resource stocks and technology/internet stocks led the early gains.

At 09:01, domestic commodity futures opened mostly lower, with new energy materials leading the decline; lithium carbonate fell 3.64%. Most ferrous metals declined, with coking coal down 2.73%. All energy products fell, with low-sulfur fuel oil dropping 2.10%. Most agricultural by-products fell, with eggs down 1.79%. Most chemical products fell, with 20号胶 down 1.19%. Base metals led the gains, with international copper up 1.51%. All precious metals rose, with Shanghai silver up 1.50%. Most oils and oilseeds rose, with soybean meal up 1.29%. All shipping futures rose, with the containerized freight index (European route) up 0.92%. Non-metallic building materials were mixed, with PVC up 0.48%.