On September 11, the A-share market experienced a broad decline on significantly higher turnover, with over 4,800 stocks closing in the red and total transaction value reaching 1.99 trillion yuan, a nearly 20% surge compared to the previous session. The Shanghai Composite Index spent the entire day below the waterline, closing down 1.18% and losing the 3,900-point mark. The Shenzhen Component Index fell 1.08%, marking its fourth consecutive losing session, while the ChiNext Index slipped 0.49%.
On the news front, a confluence of negative factors from overseas overnight weighed on sentiment: commodities collectively tumbled, a major overseas memory chip leader suffered a sharp drop, the US August PPI came in above expectations, fueling speculation of further Federal Reserve rate hikes, and the European Central Bank delivered a rate increase.
The nonferrous metals sector led the market's losses, with the underlying index of the Nonferrous Metals ETF HuaBao (159876), which encompasses leading companies across the sector, closing down 4.04% and falling below all its key moving averages. HuaBao Fund believes the current market volatility stems primarily from capital caution and sentiment-driven positioning ahead of a critical policy window, rather than a collapse in industry fundamentals.
The banking sector's attempt to prop up the market proved unsuccessful, as it retreated in the afternoon and ended its winning streak. The Bank ETF HuaBao (512800) hit a fresh intraday high for the year before pulling back, with its underlying index eventually closing down a marginal 0.46%. Despite failing to extend gains, it still significantly outperformed the broader market, highlighting its defensive characteristics during periods of market turbulence.
With the FCC policy now finalized, concerns over optical communications have visibly eased, allowing optical module leaders to strengthen against the market trend. Zhongji Innolight closed up 4% despite the weak market, while Eoptolink Technology gained nearly 3%. The high-optical-exposure ChiNext AI ETF HuaBao (159363) saw its underlying index stage a "V"-shaped rebound during the session.
Volatile overseas rate expectations continue to pressure valuations, leaving A+H innovative drug stocks broadly weak. The HK Stock Connect Innovative Drug ETF HuaBao (520880), which focuses entirely on innovative drug R&D targets, and the Pharma ETF HuaBao (562050), heavily weighted towards A-share innovative drug names, both extended their losing streak to five consecutive sessions this week.
Throughout the week, major A-share indices came under pressure with most closing lower. The ChiNext Index bucked the trend with a 1.08% gain, standing out as the sole riser. Trading volume contracted significantly, with cumulative turnover of 9.46 trillion yuan marking the lowest weekly volume of the year, potentially signaling that short-term sentiment has hit a freezing point.
The US CPI report due tonight stands as the most critical variable at this juncture: if it comes in below expectations, easing rate pressure could trigger a oversold bounce, with AI-related sectors potentially leading the charge higher. Conversely, if the data exceeds forecasts, the market may face further downward pressure.
In this hot review of ETF themes, we delve into the trading dynamics and fundamental conditions of several key sectors, including the ChiNext AI, nonferrous metals, and innovative drugs.
News Shifts Optical Module Expectations: Zhongji Innolight and Eoptolink Rise Against the Trend as the High-Optical Index Stages a V-Shape Rebound, Easing the Sword of Damocles
Optical module leaders mounted a strong defense in the afternoon session, helping to narrow the ChiNext Index's losses. Capital flowed towards opportunities in the high-optical index, with the ChiNext AI ETF HuaBao (159363) seeing elevated on-exchange activity as its underlying index performed a "V"-shaped rebound intraday.
Within the optical module supply chain, Zhongji Innolight closed up 4% against the market trend, Eoptolink Technology gained nearly 3%, Zhaolong Interconnect led with an 8.63% surge, and Kingsignal Technology rose over 7%. AI applications became active in the afternoon, with the logic of cost reduction in AI-driven filmmaking gaining traction, pushing Mango Excellent Media notably higher during intraday trading.
According to reports, on September 10 local time, the US Federal Communications Commission (FCC) published its final rule, "Preventing National Security Threats to the Communications Supply Chain Through the Equipment Authorization Program," in the Federal Register. The rule, previously passed on July 22, was officially published on September 11 and will take effect 30 days thereafter. Notably, within the 13-page rule text, optical module companies such as Eoptolink, Zhongji Innolight, and Tianfu Communication were not mentioned.
Market interpretation suggests that with the FCC policy now settled, concerns over optical communications have significantly diminished. The restrictions primarily target logic devices related to the Covered List, without expanding to the entire optical communication category, and none of the relevant companies were placed on the list. This has essentially invalidated previously extreme pessimistic assumptions. Among these, the policy certainty for the passive component segment is higher, which overall helps improve risk appetite within the optical communications sector.
Zhongtai Securities notes that optical modules remain the segment with the most substantial earnings delivery at present. The industry is poised to continue benefiting from the triple drivers of AI computing power expansion, speed upgrades, and network architecture evolution. In the optical module arena, 800G maintains high prosperity, 1.6T is entering a phase of significant volume ramp-up, with progression towards 3.2T and CPO/NPO architectures. Overall, the industry's upward cycle remains intact, with future focus on the sustainability of AI capital expenditure, the pace of high-speed product ramps, and the earnings delivery capabilities of various sub-segments.
For investors looking to position along the high-optical mainline and AI applications, the ChiNext AI ETF HuaBao (159363) and its OTC feeder funds (A-share: 023407, C-share: 023408) offer targeted exposure, with key holdings in optical module and CPO leaders alongside AI application plays. The underlying index boasts a combined weight of over 35% in Zhongji Innolight, Eoptolink Technology, and Tianfu Communication, positioning it as a core vehicle for AI computing power exposure.
Data source: Shanghai and Shenzhen Stock Exchanges, Wind, etc. Note: As of August 31, 2026, based on Guozheng Index data, the top three constituents of the ChiNext AI Index are Eoptolink Technology (12.61% weight), Zhongji Innolight (11.99% weight), and Tianfu Communication (10.25% weight).
US CPI Ahead Tonight! Triple Factors Rattle Nonferrous Metals as ETF Gaps Down; HuaBao Fund Analyzes: A New Phase May Emerge Once Macro Uncertainties Settle
As the market consolidated, major A-share indices all pulled back, with the nonferrous metals sector leading the decline. The underlying index of the Nonferrous Metals ETF HuaBao (159876), which captures the sector's leading players, gapped down at the open, at one point falling over 6.4% intraday before closing 4.04% lower.
Among constituent stocks, Western Superconducting Technologies bucked the trend with a gain exceeding 3%, Chujiang New Materials rose over 2%, and Chifeng Jilong Gold managed to close in positive territory. On the flip side, copper leaders were notably weak, with Northern Copper hitting the downside limit and Yunnan Copper dropping over 8%, leading the declines. Heavyweight names like Zijin Mining and Luoyang Molybdenum also retreated with the broader market.
What triggered the significant pullback in nonferrous metals? Several factors appear to be at play: 1) The US PPI data exceeded expectations, showing energy prices pushing up overall inflation, which sharply increased expectations of Federal Reserve rate hikes; 2) The European Central Bank's 25 basis point rate hike, coupled with growing expectations of a Bank of Japan hike, intensified concerns over tightening global liquidity, signaling a stronger US dollar. This raises the holding cost of dollar-denominated nonferrous metals, creating downward pressure; 3) The US White House has yet to finalize its refined copper tariff policy. The recent sharp rise in copper prices was partly driven by tariff expectations; now, with a slowdown in policy momentum, the sentiment supporting higher copper prices is loosening.
HuaBao Fund analysis suggests that today's pullback contains a significant element of oversold conditions. The delay in copper tariffs appears to be a tactical calculation ahead of the US midterm elections rather than an outright abandonment of the policy. While the US is seeing temporary inventory builds, global total inventories are slowly declining, and the tight supply-demand balance remains unchanged, providing underlying support for copper prices. The broad market decline is primarily attributed to the surprise US PPI and the resonance of overseas rate hike expectations. However, since the PPI overshoot was largely driven by oil prices, it is difficult to directly extrapolate tonight's US CPI trajectory from the PPI data alone, suggesting room for short-term panic sentiment to correct.
Looking ahead, the US CPI inflation data, scheduled for release at 8:30 PM Beijing time tonight (September 11), could directly influence the Federal Reserve's September FOMC meeting decision next week (September 15-16), and consequently, whether the financial attribute pressure on nonferrous metals diminishes.
HuaBao Fund maintains that current market volatility stems from capital caution and sentiment games ahead of key windows, not a collapse of industry logic. They advise investors to remain rational, avoid emotional trading, and patiently await the full digestion of macro disruptions. In the new market phase following the Fed's September meeting and before the US November midterm elections, valuation repair and fundamental growth logic for the nonferrous sector may gradually reassert themselves. Overall, the short-term pullback solidifies the sector's base, and the medium-to-long-term allocation value of nonferrous metals remains attractive.
In the era of computing power, nonferrous metals provide the foundational support. The Nonferrous Metals ETF HuaBao (159876) and its feeder funds (A-class: 017140, C-class: 017141) track an index that comprehensively covers leaders in copper, aluminum, rare earths, gold, lithium, tungsten, molybdenum, tin, and other sectors, with heavyweight constituents including Zijin Mining, Luoyang Molybdenum, China Northern Rare Earth, and Aluminum Corporation of China. According to 2026 interim results, all 60 constituent stocks were profitable, with nearly half reporting net profit attributable to parent growing more than 100% year-on-year, providing solid fundamental support. Furthermore, the index contains significantly more constituents than comparable nonferrous indices (typically 30-50 stocks), enabling broader coverage of semiconductor and new materials directions. This makes it a suitable one-stop tool for investors who are bullish on both technology and nonferrous metals, capturing the sector's beta.
Note: The individual stocks mentioned herein are constituent stocks of the underlying index of the Nonferrous Metals ETF HuaBao (159876). As of the end of August, their respective weights were: Western Superconducting Technologies, 0.97%; Chujiang New Materials, 0.57%; Chifeng Jilong Gold, 3.33%; Northern Copper, 0.62%; Yunnan Copper, 1.08%; Zijin Mining, 11.14%; Luoyang Molybdenum, 7.12%; China Northern Rare Earth, 4.40%; Aluminum Corporation of China, 3.31%. The constituent stocks mentioned are for illustrative purposes only and do not constitute investment advice in any form, nor do they represent the holdings or trading activities of any fund managed by the fund manager.
Major Conference Looms, Yet Innovative Drugs Show No Respite; HuaBao Fund's HK Stock Connect Innovative Drug ETF (520880) Falls Below All Moving Averages
On the eve of the 2026 WCLC (World Conference on Lung Cancer), A+H innovative drug stocks have yet to halt their decline, extending their losing streak to five consecutive sessions this week. The HK Stock Connect Innovative Drug ETF HuaBao (520880), which invests 100% in innovative drug R&D companies, has fallen below all its key moving averages. Meanwhile, the underlying index of the Pharma ETF HuaBao (562050), heavily weighted towards A-share innovative drug names, has posted five consecutive bearish candles on both daily and weekly charts.
What's driving this round of adjustments in the innovative drug sector? A synthesis of market analysis points to a confluence of three pressures. From a news flow perspective, the conclusion of national medical insurance negotiations prompted early investors to take profits. From September 5 to 8, the on-site negotiation and bidding for the 2026 National Basic Medical Insurance Drug Catalogue concluded, alongside price consultations for commercial health insurance innovative drug catalogues. With negotiations over and a waiting period for results, a lack of near-term catalysts has led early investors to cash in gains, triggering a "sell-the-fact" correction.
From a sentiment perspective, volatile overseas rate expectations continue to suppress valuations. The 10-year US Treasury yield has climbed to near three-year highs, with the market pricing in approximately a 70% probability of a 25 basis point Fed rate hike. This directly pressures innovative drug companies, whose valuations rely heavily on discounted future cash flows. Additionally, rising energy supply risks and oil price increases fueling inflation concerns further dampen appetite for high-risk growth stocks.
From a capital flow perspective, rotation is driving outflows. The A-share and HK markets have been experiencing shrinking volumes and range-bound trading recently, with accelerating sector rotation. Capital is swiftly shifting between sectors, with some flowing out of innovative drugs and into defensive directions such as high-dividend plays due to risk aversion.
What's the outlook? In the short term, sentiment may drive continued consolidation. However, from a medium-term perspective, a dense calendar of industry catalysts could reignite upward momentum: The WCLC on September 12 and the ESMO (European Society for Medical Oncology Annual Meeting) on October 23 will feature key clinical data disclosures from companies like Kelun-Biotech, RemeGen, and Sino Biopharmaceutical. Furthermore, the new medical insurance/commercial insurance catalogue will take effect on January 1, 2027.
For investors considering positioning in innovative drugs at lower levels, two instruments are worth noting. The HK Stock Connect Innovative Drug ETF HuaBao (520880) closely tracks the Hang Seng HK Stock Connect Innovative Drug Select Index, with 100% exposure to innovative drug R&D companies. Its top ten holdings account for over 70% of the portfolio, highlighting a strong large-cap orientation. Underlying assets are HK-listed, offering high beta and T+0 trading. The Pharma ETF HuaBao (562050) is the only ETF in the market tracking a pharmaceutical index, with a unique "72% innovative drugs + 22% traditional Chinese medicine" allocation, combining the high growth of innovative drugs with the high dividends of TCM.
Data sources: CSI Index Company, Shanghai-Hong Kong-Shenzhen Stock Exchanges, iFind, etc.
Institutional view: Zhongtai Securities, "Optical Communication Prosperity Continues, Awaiting Valuation Repair - 2026 Semi-Annual Summary of the Optical Communication Industry."
Fund fee note: ETF funds do not charge sales service fees. When subscribing or redeeming fund shares, the authorized broker may charge a commission of up to 0.5%, which includes fees charged by the stock exchanges and registration institutions. Please refer to the fund's legal documents for detailed fee information.
Special reminder: According to the fund manager's assessment, the ChiNext AI ETF HuaBao, the HK Stock Connect Innovative Drug ETF HuaBao, and their feeder funds carry a risk rating of R4 (medium-high risk), suitable for aggressive (C4) and above investors. The other funds mentioned herein carry a risk rating of R3 (medium risk), suitable for balanced (C3) and above investors. Please refer to the sales institution for suitability matching opinions.
Risk disclosure: The Bank ETF HuaBao passively tracks the CSI Bank Index, with a base date of December 31, 2004, and published on July 15, 2013. The CSI Bank Index's returns over the past 5 complete fiscal years were: 2025, 6.79%; 2024, 34.71%; 2023, -7.27%; 2022, -8.78%; 2021, -4.41%. Its volatility over the past 5 complete fiscal years was: 2025, 14.03%; 2024, 19.34%; 2023, 13.41%; 2022, 18.56%; 2021, 18.63%. Constituent stocks are adjusted according to the index methodology; past performance does not indicate future results. The individual stocks mentioned are solely objective displays of index constituents and do not constitute stock recommendations, nor do they represent the fund manager or fund investment direction. Any information appearing herein (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of statements) is for reference only. Investors are solely responsible for their own investment decisions. Furthermore, any views, analyses, or forecasts herein do not constitute investment advice to readers of any form, and the company shall not be liable for any direct or indirect losses arising from the use of the content herein. Investors should carefully read fund legal documents such as the Fund Contract, Prospectus, and Fund Product Summary to understand the fund's risk-return characteristics and choose products that match their risk tolerance. A fund's past performance does not indicate its future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of a fund's performance. Sales institutions (including the fund manager's direct sales and other sales institutions) conduct risk assessments of the above funds according to relevant laws and regulations. Investors should promptly pay attention to the suitability opinions issued by the fund manager. Suitability opinions from various sales institutions may not be consistent, and the risk rating results issued by fund sales institutions shall not be lower than the risk rating results made by the fund manager. The risk-return characteristics and risk ratings in the fund contract may differ due to different considerations. Investors should understand the fund's risk-return profile and carefully choose fund products based on their investment objectives, time horizon, investment experience, and risk tolerance, bearing risks themselves. The registration of the above funds by the China Securities Regulatory Commission does not indicate a substantive judgment or guarantee of their investment value, market prospects, or returns. Fund investment requires caution.