Today, the A-share market staged a rebound after earlier declines. The Shanghai Composite Index rose 1.79%, reclaiming the 3,800-point level, while the Shenzhen Component Index gained 4.81% and the ChiNext Index surged 7.05%. The combined trading volume for the Shanghai and Shenzhen markets was approximately 1.40 trillion yuan, showing an increase from the previous session. A majority of individual stocks advanced, with over 3,100 stocks rising across the board. At the sector level, semiconductors and communication equipment led the gains, while sectors like oil & gas, banking, and coal experienced some pullback.

The significant surge today is attributed to a substantial release of trading congestion and leverage pressure within the technology sector following its recent rapid adjustments. This, combined with sustained inflows of medium to long-term capital, has driven a technical rebound from an oversold condition. Substantial net inflows were observed in the ChiNext and STAR Market during yesterday's closing session. On July 20th, the CSRC Chairman emphasized the commitment to maintaining stable market operations. Furthermore, numerous institutions have recently conveyed positive signals. Following announcements from two central state-owned enterprises, China Reform Holdings and China Chengtong Holdings, expressing firm confidence in the prospects of China's capital markets and increasing their holdings of stock assets on the evening of July 19th, a large number of other central SOEs, state-owned enterprises, and listed companies have also announced share buyback and repurchase plans. Concurrently, insurance capital institutions have expressed confidence in the market. China Pacific Insurance stated its firm optimism regarding the long-term development prospects of China's capital market, indicating plans to increase the proportion of equity asset allocation and continue investing in stocks and ETFs related to technology growth, consumption, and new energy sectors. Ping An Insurance also affirmed its long-term confidence in the value of China's capital market, committing to continue increasing investments in strategic emerging industries, advanced manufacturing, new infrastructure, and value-oriented assets.

Currently, the domestic policy floor may be largely established, and global deleveraging is nearing its end, with trading-related pressures gradually easing. Major Asian markets, including Japan and South Korea, closed sharply higher today. However, market volatility remains elevated, and the possibility of a secondary dip before another rebound cannot be ruled out.

Technology Sector Analysis

The market rebounded today, with the technology sector leading the charge. ETFs such as the Semiconductor Equipment ETF (159516), Chip ETF (512760), Integrated Circuit ETF (159546), and IT Application Innovation ETF (159537) all surged by the daily limit. The STAR Market Chip ETF (589100) and STAR Market Chip Design ETF (589260) rose over 10%, while the Consumer Electronics ETF (561310) and Communication ETF (515880) gained over 8%.

Previously, deleveraging in the South Korean stock market and adjustments in overseas tech stocks created significant disturbances for China's A-share technology sector. However, the medium to long-term trend remains intact, with the AI industry demonstrating resilience. According to the latest Morgan Stanley research report, the 2027/2028 capital expenditure forecasts for the five overseas hyperscale cloud providers have been collectively raised by 9%-10%, with absolute amounts expected to reach $1.2 trillion and $1.4 trillion, respectively.

Additionally, ChangXin Memory Technology's IPO is imminent, with its capacity expansion accelerating. Its IPO prospectus indicates plans to raise up to 29.5 billion yuan. Given its unique position as the only scaled DRAM manufacturer in China and its rapid capacity expansion, its post-IPO capital expenditures are expected to provide sustained momentum for the upstream equipment industry chain.

AI represents a monumental industrial revolution, potentially surpassing the impact of PC proliferation. Currently, global AI infrastructure construction is accelerating. Specific sub-sectors such as optical modules and PCBs are in a phase of positive second-order growth, meaning their growth rates are expected to increase further next year, indicating sustained and rising industry prosperity.

Interested investors may consider the following thematic ETFs: PCB Expansion – Industrial Machine ETF (159667); Storage – IT Application Innovation ETF (159537); Optical Transport Capacity – Communication ETF (515880); Storage Capacity Expansion – Semiconductor Equipment ETF (159516); Computing Power Chips – STAR Market Chip ETF (589100).

Gold Sector Analysis

The Gold Stock ETF (517400) surged 6%, while the Nonferrous Metals ETF (159881) and the Mining ETF (561330) rose nearly 5%.

Earlier, market fears of interest rate hikes originated from the stronger-than-expected May non-farm payrolls data and related commentary. However, with inflation having peaked and June non-farm payrolls falling short of expectations, rate hike expectations have begun to soften. Simultaneously, the trend of central bank gold purchasing has clearly resumed, with physical demand providing solid bottom support for gold prices. International gold prices have stabilized above the $4,000 per ounce mark and moved higher.

Following a significant synchronized correction in commodities and equities due to macro tightening concerns, the valuation of the gold sector is now in a historically low range, highlighting its attractiveness. If next week's CPI data shows further decline and the July FOMC meeting signals a dovish stance, tightening concerns may temporarily subside.

From an industrial logic perspective, the long-term pricing anchor for gold lies in declining real interest rates, continued central bank accumulation globally, and the rebalancing of the credit system. Amid intertwined factors of the rate cut path and geopolitical uncertainties, the strategic allocation value of precious metals may remain supported.

Interested investors can consider the Gold ETF (518800), which directly tracks the domestic gold price, or the Gold Stock ETF (517400), which may offer higher earnings leverage.

New Energy Sector Analysis

The new energy sector also rebounded today. The ChiNext New Energy ETF (159387) rose 4.99%, and the New Energy Vehicle ETF (159806) gained 4.21%.

Details on the consumption tax policy implementation are as follows: For lithium-ion batteries, lithium primary batteries, vanadium redox flow batteries, mercury-free primary batteries, and nickel-metal hydride batteries, a 2% consumption tax rate will apply from September 1, 2026, increasing to 4% from September 1, 2027. For photovoltaic cells, a 2% rate applies from April 1, 2027, increasing to 4% from April 1, 2028. Exemptions are granted for sodium-ion batteries, solid-state batteries, fuel cells, and specific photovoltaic cell types like perovskite, tandem, and gallium arsenide cells from September 1, 2026, to December 31, 2028.

Rumors of this consumption tax policy adjustment emerged in early May, after which the lithium battery sector experienced a deep correction. Stock prices have adjusted considerably, making valuations more attractive. Looking ahead, demand remains optimistic. Unlike the previous cycle focused on domestic passenger vehicles, demand in this cycle is more diversified. European/emerging market passenger vehicles, domestic commercial vehicles, and overseas energy storage are all at inflection points of accelerating penetration, suggesting smoother demand growth. U.S. data center energy storage is expected to contribute incremental demand from 2027, and domestic standalone energy storage still has growth potential, with additional scenarios like computing-power synergy and direct green power connections anticipated.

Battery manufacturers' production schedules for July-August remain robust, and September-October may usher in the traditional peak sales season, allowing for potential expectation revisions. Interested investors can consider the ChiNext New Energy ETF (159387), which offers the 20% daily price limit and provides exposure to lithium batteries, energy storage, photovoltaics, and wind power. As of June 30, 2026, the underlying index comprises approximately 62% in solid-state/energy storage, 32% in sodium-ion batteries, and 32% in hydrogen energy.

Investment Risk Considerations

Investors should fully understand the differences between regular fund investment plans and savings methods like lump-sum deposits. Regular investment is a simple way to facilitate long-term investing and average cost, but it does not eliminate the inherent risks of fund investing, guarantee profits, or serve as an equivalent substitute for savings. Equity ETFs/LOFs/structured funds are securities investment fund products characterized by relatively high expected risk and return levels, with expected returns and risks higher than those of hybrid funds, bond funds, and money market funds. Funds investing in STAR Market and ChiNext stocks face specific risks related to investment targets, market systems, and trading rules. Short-term performance figures for sectors/funds are presented as supplementary material for analysis purposes only and do not constitute a guarantee of future fund performance. Mentions of individual stock performance are for reference only and do not constitute stock recommendations or forecasts/guarantees of fund performance. The views above are for reference only and do not constitute investment advice or promises. When purchasing relevant fund products, please pay attention to regulations on investor suitability, complete a risk assessment in advance, and purchase fund products with risk levels matching your own risk tolerance. Funds carry risks, and investing requires caution.