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On July 18, the A-share market opened low and ended high, with the three major indexes all bottoming out and rebounding after falling in the morning. The Shanghai Composite Index closed up 14.28 points, or 0.48%, at 2977.13 points; the Shenzhen Component Index closed up 44.19 points, or 0.5%, at 8879.33 points; and the ChiNext Index closed up 21.26 points, or 1.25%, at 1717.71 points.

The trading volume of the Shanghai and Shenzhen stock markets today was 672.3 billion yuan, down 2.7 billion yuan from the previous trading day.

In terms of individual stocks, the number of stocks that rose exceeded 2,100. Industry sectors rose and fell, with education, electronic chemicals, railways and highways, aerospace, and shipbuilding sectors leading the gains, while consumer electronics, optical optoelectronics, electronic components, and automotive services sectors led the declines.

Today's market was full of ups and downs. The sharp drop of the Nasdaq last night made A-share investors nervous before the opening. As expected, what they feared came true. The three major indexes all opened low and fluctuated in the morning. After 10 o'clock, the market suddenly increased in volume. The ChiNext Index once turned positive, but then fell into adjustment. At 10:51, the ChiNext Index rose again and turned positive before noon. The Shanghai Composite Index and the Shenzhen Component Index also followed the rise.

From the perspective of funds, although the ChiNext Index was the first to turn positive, all three major indexes eventually closed in the red, and the mysterious funds that bought the CSI 300 ETF contributed greatly to this.

After the trading volume of four CSI 300 ETFs hit a record high since March 5 yesterday, the trading volume of CSI 300 ETFs continued to be active today. Specifically, the buying of CSI 300 ETFs was relatively mild in the morning, but near noon, many CSI 300 ETFs increased significantly, and the time coincided with the upward attack of the three major indexes.

Regarding the huge amount of funds that continuously bought the CSI 300 ETF at a low level, the market generally believes that the national team is supporting the market.

On the evening of July 17, several large fund companies such as Huaxia, E Fund, and Harvest disclosed the second quarter reports of their funds. The quarterly reports showed that after the large-scale subscription of broad-based ETFs in the first quarter, Central Huijin continued to maintain the rhythm of net subscription in the second quarter, including E Fund CSI 300, Harvest CSI 300, Huaxia CSI 300, Huaxia SSE 50 and many other ETFs. According to the average transaction price, the subscription amount in the second quarter may be close to 15 billion yuan. At present, the second quarter reports of important broad-based ETFs such as Huatai-PineBridge CSI 300 ETF and Southern CSI 500 ETF have not yet been disclosed. With the further disclosure of the second quarter reports in the future, the subscription data of Central Huijin in the second quarter may be expected to increase further.

The modest increase in volume of the CSI 300 ETF also boosted the A-share sentiment and created conditions for speculation in other sectors.

Photolithography machines have become one of the mainstream tracks of A-shares today. Last night, the third-quarter performance guidance of global giant ASML failed to meet market expectations, and its stock price plummeted by nearly 13%.

It is predicted that the global photolithography market will reach US$29.57 billion in 2024, with ASML, Nikon, and Canon accounting for the majority of the market share. In addition, the semiconductor photoresist market is basically monopolized by Japanese companies. Among the top five companies in the market, Tokyo Ohka, Dow Chemical, JSR, and Sumitomo Chemical are all Japanese companies.

Against the backdrop of ASML's performance not meeting expectations, the market has given more room for imagination about the accelerated breakthrough of domestic substitution of lithography machines. This morning, the lithography machine sector rose rapidly at the opening, with Dongfang Jiasheng and Jinghua Laser hitting the daily limit, Lanying Equipment 20cm hitting the daily limit, Zhangjiang Hi-Tech, Xinyuan Micro, Rongda Photosensitive, Guangxin Materials and others following suit.

Recently, many sell-side research institutions have covered listed companies in the lithography machine and photoresist industries. For example, in April and May this year, after the photoresist company Tongcheng New Materials released its 2023 annual report and 2024 first quarter report, Minsheng Securities, Zhongtai Securities, Huaan Securities, Huaxin Securities, etc. all issued research reports on the stock, and Huaxin Securities and Huaan Securities both covered the company for the first time.

But this is not the first time that the lithography sector has been hyped this year. From February to March this year, the lithography sector has been hyped once, and then related stocks may enter a sideways trend or a sharp correction. In general, against the background of the rapid rotation of A-share growth sectors, the hype time of each sector and concept may not be too long.

Another highlight today is the driverless sector. After yesterday's correction, driverless has become a hot spot for capital chasing. Volkswagen Transportation, Longjiang Transportation, Haima Automobile, Xingmin Zhitong hit the daily limit, and Tianmai Technology hit the 20cm daily limit.

On the news front, local governments continue to support driverless cars. On July 17, Haikou Meilan International Airport launched an autonomous public transport shuttle on its open roads. Meilan Airport said that the launch of the autonomous shuttle project is an important achievement in the airport's continuous promotion of smart airport construction, and that it will continue to explore the application of autonomous driving technology in more scenarios in the future.

CITIC Securities Research Report believes that high-level autonomous driving has recently seen intensive catalysis. With the "policy opening + cost reduction + efficiency improvement", the launch of high-level autonomous driving products is accelerating. Tesla's entry is expected to further expand its voice, which is good for the industry chain. Investors are advised to pay attention to: autonomous driving technology providers; autonomous driving head component suppliers; roadside equipment and cloud control platform suppliers; vehicle OEM service providers.

In addition, high-dividend stocks are still favored. The share price of Yangtze Power hit a new record high. The stock has been breaking new highs recently. In the past month, there have been 10 trading days with a record high share price. China Mobile's share price also hit a new high, with a total market value of more than 2.37 trillion yuan.

However, some are happy while others are sad. The most eye-catching Beijing Stock Exchange yesterday was temporarily shut down after only one day. The sharp drop of the Nasdaq overnight obviously affected the sentiment of investors in the Beijing Stock Exchange, and the Beijing Stock Exchange 50 fell 4.03% today.

The consumer electronics sector also fell into adjustment. Even though the three major indexes turned positive, they failed to drive most stocks to rise. Today, Zhixin Electronics fell 14.8%, Yabaoxuan fell 11.7%, Derun Electronics fell 6.03%, and Zhidongli, Wanxiang Technology, Yingli Shares, etc. also fell.

Regarding the rapid rotation of market hotspots recently, Guosheng Securities’ point of view is worth referring to.

It pointed out that the overall market has maintained weak volatility recently. Insufficient volume is the biggest hindrance to the market's rise, and the money-making effect is difficult to sustain. For example, the consumer electronics and semiconductor sectors, which were stimulated by both news and mid-term performance, rose strongly on Tuesday and then collectively pulled back on Wednesday. The adjustment of the main technology line also made funds lose their offensive direction and unable to form a joint force. In fact, from the index level, the Shanghai Composite Index MACD indicator 60-minute line and daily line level both showed bottom divergence signals, which also added a bit of confidence to the subsequent rise.

The key point is still the volume. Only the entry of incremental funds can bring about the profit effect. If the volume is insufficient, the rise will be difficult to continue. In addition, it should be noted that in the context of continuous shrinking volume, funds will gather in high-dividend sectors to produce a siphon effect. Small-cap stocks may find it difficult to attract funds, and special precautions should be taken against the continuous decline caused by this. In terms of direction, continue to pay attention to the main line of the mid-term performance report, focus on the consumer electronics and semiconductor sectors, and look for opportunities to step back and make trend layouts.

Investment is risky, independent judgment is important

This article is for reference only and does not constitute a basis for buying or selling. You should bear the risks of entering the market at your own risk.

Cover image source: Visual China-VCG211298090733

Reporter Wang Yandan, Editor Peng Shuiping

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