A-share Opening Express | Three Major Indices Open Higher, STAR 50 Rises Over 8%
Complete. Here is the key summaryOn July 31, the three major A-share indices opened high, with the STAR 50 rising over 8%. The technology growth style made a strong comeback, with sectors such as telecommunications and semiconductors performing well; however, weighty sectors like banking and liquor faced pressure. The Politburo meeting set the tone for capital market reforms, and the Federal Reserve's decision to maintain interest rates sent a hawkish signal
According to Zhitong Finance APP, on July 31, the Shanghai Composite Index opened up 0.76% at 3833.54 points, the Shenzhen Component Index opened up 3.04% at 13690 points, the ChiNext Index opened up 5.15% at 3411.61 points, and the STAR 50 opened up 8.37% at 1721.36 points.
As of the time of writing, there were 4,076 stocks rising and 1,241 stocks falling in the two markets and the Beijing Stock Exchange, with 217 stocks flat.
Top Gainers: Communication equipment, components, semiconductors, electronic chemicals, glass fiber, automation equipment, etc.; Top Losers: White goods, banks, liquor, commercial vehicles, oil service engineering, insurance, etc.
Market Situation
In today's morning session, the technology growth style made a strong comeback, with the STAR 50 and ChiNext Index opening significantly higher. Hard technology sectors such as communication equipment, semiconductors, and components collectively strengthened, with more stocks rising than falling, and the number of stocks hitting the daily limit reached 21, indicating a significant recovery in market profitability. Meanwhile, heavyweight sectors such as banks, liquor, and white goods faced pressure, with the banking sector, which performed strongly in the previous trading day, leading the decline at the open. There are signs of a shift in funds from defensive sectors to growth sectors. The trading volume in the two markets significantly increased compared to the previous trading day, indicating heightened market activity.
Overnight News Brief
Political Bureau meeting sets the tone for capital market reform: On July 30, the Political Bureau of the Central Committee of the Communist Party of China held a meeting, emphasizing "deepening comprehensive reforms in capital market investment and financing, enhancing the resilience and confidence of the capital market." Macro policies need to be effective and efficient, accelerating fiscal expenditure and the use of bond funds, and effectively promoting the construction of "two 重" and "two 新" work, ensuring the bottom line of "three 保" at the grassroots level. The meeting included the capital market in the macro safety barrier system, highlighting its strategic position.
Federal Reserve maintains interest rates, signaling a hawkish stance: The U.S. Federal Reserve announced at the July FOMC meeting that it would keep the federal funds rate target range unchanged at 3.5% to 3.75%, marking the fifth consecutive time this year of "holding steady." Three voting members advocated for a 25 basis point rate hike in this decision, and Federal Reserve Chairman Waller emphasized that the 2% inflation target remains unchanged, keeping the option for further rate hikes open.
Central Bank conducts large-scale reverse repos to safeguard month-end liquidity: To maintain stable month-end liquidity, the Central Bank conducted a 270.5 billion yuan 7-day reverse repo and a 600 billion yuan overnight reverse repo operation on July 30, with an operation rate of 1.40%. Due to 804 billion yuan of reverse repos maturing that day, a net injection of 66.5 billion yuan was achieved, reaching a new high in over a year and a half. The Central Bank stated it would continue to promote the reform and improvement of the monetary policy operation framework.
Trend Analysis
Today, the technology growth sector rebounded significantly at the open, with the STAR 50 opening up over 8% and the ChiNext Index opening up over 5%, indicating a strong willingness to repair growth styles after a deep correction in the previous trading day. The Political Bureau meeting proposed "enhancing the resilience and confidence of the capital market," combined with several leading companies intensively announcing repurchase and increase holdings, providing certain support for market sentiment. Institutional consensus leans towards the short-term market possibly continuing a volatile pattern. On the overseas front, the Federal Reserve's hawkish statements still pose external disturbances, but overnight U.S. stocks closed higher across the board, indicating a recovery in market risk appetite Attention should be paid to the sustainability of the rebound in the technology sector and whether trading volume can further expand.