At midday on August 24th, China's A-share market opened with mixed performance across the three major indices, but collectively weakened during the morning session. The market displayed a pattern of broad index pullback, widespread stock declines, and defensive sectors gaining traction against the trend. By the lunch break, the Shanghai Composite Index had fallen 0.71% to 3,877.30 points, the Shenzhen Component Index dropped 2.44% to 13,750.12 points, the ChiNext Index slid 3.50% to 3,421.50 points, and the STAR 50 Index declined 3.26% to 1,599.65 points. Nearly 4,300 stocks across the market were trading lower, with only 41 stocks hitting the daily limit up. Combined turnover for the Shanghai and Shenzhen exchanges reached 1.37 trillion yuan in the morning session, up 117.7 billion yuan from the previous trading day.

In terms of sector performance, coal, agriculture and fishery, solid-state batteries, and digital currency stocks strengthened against the broader market decline. On the downside, computing hardware, biological products, and printed circuit board sectors moved lower. Overall, intraday data showed that main capital flows were directed toward non-ferrous metals, industrial metals, and non-bank financial sectors, while funds flowed out of electronics, semiconductors, and telecommunications. Capital rotated away from high-valuation areas like computing hardware and pharmaceuticals, moving into price-increase and defensive plays such as coal and non-ferrous metals.

Coal Sector Rises Against Market Trend

The coal sector climbed against the broader market weakness, with Shanghai Energy and Meijin Energy hitting the daily limit up. Shaanxi Coal Industry gained over 3%, with China Shenhua and others following suit. On the news front, the main coking coal futures contract rose nearly 4% during the day. According to industry data, some steel mills in Hebei and Tianjin raised their coke procurement prices for the first time starting from August 24th, by 50-55 yuan per ton. Meanwhile, coking coal prices in Linfen Anze market increased by 330 yuan per ton. Data released by the National Bureau of Statistics today showed that anthracite prices rose 3.1% month-on-month in mid-August, while coking coal prices increased 7.1%, with rising coal prices lifting the sector higher.

Solid-State Battery Concept Stocks Show Activity

Solid-state battery concept stocks performed actively, with Tianli Lithium Energy hitting the 20% daily limit up, while Shanghai Xiba, Jinlongyu, Dexin Technology, and Shengyang Co., Ltd. also hit their daily limits. According to CCTV News, an international standard proposal on solid-state batteries for electric vehicle drive systems, submitted by China, was recently approved for project initiation at the International Electrotechnical Commission. This accelerated progress in solid-state battery standardization has driven related stocks higher.

Digital Currency Sector Maintains Momentum

The digital currency sector continued its strong run, with Chutian Dragon and Eastcompeace hitting the daily limit up. Eastcompeace's semi-annual report, released on August 22nd, showed digital security and platform business revenue of 215 million yuan, up 24.10% year-on-year, and the company also won a bid for a major operator's eSIM profile download service project. According to the company's investor relations activity records, its digital yuan hard wallets and terminal products have been deployed in scenarios such as enterprise parks, exhibitions, and consumer applications. Expectations for accelerated cross-border payment scenarios for the digital yuan have also contributed to sector strength.

Agriculture and Fishery Sector Defies Downtrend

The agriculture and fishery sector moved higher against the market decline, with Tianshan Bio hitting the 20% daily limit up, Deng Hai Seed hitting the limit up, Qiule Seed rising over 10%, and Shennong Seed following suit. According to a report from the United Nations Food and Agriculture Organization, the global food price index in July reached its highest level since January 2023, with grain prices up 6.9% year-on-year. Disruptions to exports from the Black Sea region have intensified concerns about global food supply. Additionally, data from the National Bureau of Statistics showed that live hog prices rose 5.8% month-on-month in mid-August.