The PBOC said it will continue to implement a moderately loose monetary policy in 2H26 and step up efforts to expand domestic demand. The State Administration of Foreign Exchange said it will steadily expand institutional opening-up in the foreign exchange sector in 2H26 and strengthen monitoring of cross-border capital flows. China's RatingDog Manufacturing PMI fell to 50.9 in July, a four-month low and below the market expectation of 52.

The RMB central parity against the USD was set at 6.7898, down 4 bps daily. The PBOC conducted RMB63 billion seven-day reverse repos, while RMB925.5 billion reverse repos matured. In addition, the PBOC conducted RMB300 billion overnight reverse repos, resulting in a net daily withdrawal of RMB562.5 billion.

The three major A-share indices opened down 0.5% to 0.7% and slipped 0.4% to 0.6% by midday. The Shanghai Composite Index fell 22 points, or 0.59%, to 3,809, with turnover of RMB644.513 billion. The Shenzhen Component Index dropped 61 points, or 0.45%, to 13,517, with turnover of RMB720.556 billion. The ChiNext Index fell 14 points, or 0.44%, to 3,329, with turnover of RMB336.373 billion.

Multiple commercial banks collectively disclosed the upper limit of annualized comprehensive financing costs for personal loans with normal repayment, while relaunching five-year large-denomination certificates of deposit. Banking stocks ICBC (601398.SH) -0.150 (-1.877%) and CCB (601939.SH) -0.470 (-4.332%) fell 1.9% and 4.3%, respectively, while CMB (600036.SH) +0.550 (+1.388%) rose 1.4%. Among insurers, CHINA LIFE (601628.SH) -0.850 (-2.151%) fell 2.2%, while CHINA PACIFIC INSURANCE (601601.SH) +0.220 (+0.680%) gained 0.7%. In addition, BYD Company (002594.SZ) -0.420 (-0.439%) slipped 0.4% after its July new energy vehicle sales rose nearly 22% YoY, with exports exceeding 180,000 units. CONTEMPORARY AMPEREX (300750.SZ) -2.030 (-0.514%) fell 0.5% after announcing strategic cooperation with Pinglu Canal Group.

Chip stocks were under pressure, with SMIC (688981.SH) -5.890 (-4.750%) down 4.8% and HUA HONG GRACE (688347.SH) -16.600 (-6.978%) plunging nearly 7%. AI chip stock CAMBRICON (688256.SH) -59.830 (-5.410%) dropped 5.4%. Domestic GPU stocks METAX (688802.SH) -11.270 (-1.636%) and MOORE THREADS (688795.SH) -2.480 (-0.435%) fell 1.6% and 0.4%, respectively. LQKJ (688008.SH) -12.250 (-5.979%) slid nearly 6%. Optical fibre stock YANGTZE OPTICAL FIBRE (601869.SH) -5.190 (-1.912%) declined 1.9%. Memory chip stock GIGADEVICE (603986.SH) -29.920 (-7.903%) slumped 7.9%. SEMIGHT INSTRUMENTS (688808.SH) -8.000 (-0.488%) fell 0.5%.

"New king of IPOs" CXMT (688825.SH) +1.460 (+2.705%) rose 2.7%, with turnover reaching RMB21.814 billion and total market capitalization at RMB3.71 trillion. The company's sixth-generation Low Power Double Data Rate memory standard (LPDDR6) is reportedly nearing completion of R&D verification.

The three leading optical module makers advanced in the morning session, with ZHONGJI INNOLIGHT (300308.SZ) +24.030 (+2.664%) up 2.7%, TFC (300394.SZ) +14.070 (+8.228%) surging 8.2%, and EOPTOLINK (300502.SZ) +2.490 (+0.629%) edging up 0.6%.

The State Council executive meeting approved four nuclear power projects including the Phase I project in Zhuanghe, Liaoning. Market estimates suggest total investment will exceed RMB170 billion. Nuclear power stocks bucked the trend, with CNEC (601611.SH) +1.060 (+10.047%) , LIBERT (605167.SH) +1.310 (+10.008%) and JIANGSU SHENTONG (002438.SZ) +1.270 (+10.000%) all hitting limit up.

According to reports, the overall scale of UHV projects under construction by State Grid during the 15th Five-Year Plan period will be double that of the 14th Five-Year Plan period. Grid equipment stocks JIUSHENG ELECTRIC (301082.SZ) +1.770 (+20.000%) and BENEFO ELEC (600468.SH) +0.570 (+10.088%) both hit limit up. (jl/da)(A Shares quote is delayed for at least 15 mins.)