China's three major stock indices experienced a sharp collective decline today (July 13). By the market close, the Shanghai Composite Index had fallen 2.06% to 3913.79 points, the Shenzhen Component Index dropped 3.48%, and the ChiNext Index lost 3.10%. Combined trading volume across the Shanghai, Shenzhen, and Beijing markets reached 283.49 billion yuan, a decrease of 57.6 billion yuan from the previous session.

In terms of sector performance, high-dividend stocks demonstrated strength against the downward market trend. The banking sector moved independently higher, with the flagship 华宝基金银行ETF (512800) opening lower but then rising, with its on-exchange price surging nearly 2% at one point, ultimately closing up over 1%. Other ETFs focusing on large-cap blue-chip stocks with "high dividends and low valuations," such as 价值ETF华宝 (510030) and A500红利低波ETF华宝 (159296), also saw their on-exchange prices close up more than 1%. Influenced by geopolitical tensions, international oil prices surged, leading to a strong performance in the oil and petrochemical sectors. 石油ETF华宝 (159019), which provides exposure to the entire oil and gas industry chain, closed up 0.71% on-exchange.

On the downside, the technology sector saw a collective decline. Hong Kong-listed hard tech stocks experienced another round of correction. The largest and most liquid* ETF in its category, 港股通信息技术ETF华宝 (159131), saw its on-exchange price close down 6.39%.

Sector Performance Analysis

Banking Sector's Defensive Rise

On July 13, the banking sector defied the broader market downturn and moved higher independently. Among the 42 bank stocks, all except Chengdu Bank (which fell a slight 0.33%) closed in positive territory. Suzhou Bank led the gains, rising over 6%, followed by Ningbo Bank up more than 5%, and Chongqing Rural Commercial Bank up over 4%. Xiamen Bank, China Construction Bank, and Qilu Bank all gained more than 3%, while 16 other stocks, including major state-owned banks, rose over 2%.

The flagship 华宝基金银行ETF (512800) opened lower but climbed throughout the session, with its on-exchange price nearing the 60-day moving average and closing up 1.56%. Over a longer horizon, the banking sector has shown a V-shaped recovery since hitting a low in late June. The CSI Bank Index has gained 5.43% since July 1, significantly outperforming the broader market.

Drivers for this performance include a short-term shift in capital from high-volatility, high-valuation growth sectors towards low-volatility, low-valuation areas like banking, which offers a temporary configuration advantage. Furthermore, the banking sector's fundamentals remain robust and its valuation is near multi-year lows. Mid-year performance forecasts indicate strong resilience for the first half, with expected revenue growth of 7.1% year-over-year and net profit growth of 3.2%. As of July 13, all bank stocks trade below book value, with the CSI Bank Index's price-to-book ratio at 0.64 times, near a 10-year low. The sector's dividend yield remains above 5%, attractive to long-term investors like insurance funds and pensions.

Food and Beverage Sector Shows Resilience

The food and beverage sector also displayed notable resilience. 华宝基金食品饮料ETF (515710), which tracks the sector's overall performance, traded in a tight range and closed down only 0.42%, significantly outperforming major indices like the Shanghai Composite (-2.06%) and the CSI 300 (-1.79%). Among its constituents, consumer staples led the gains, with Milkground up over 3%, and Meihua Bio, Yanjing Beer, and Zhujiang Beer all rising more than 2%. Decliners included Yangyuan Beverage, Shede Spirits, and Jingui Liquor.

A recent project announcement in Dejiang County, Guizhou, involving a 1.2 billion yuan investment to build a liquor production industrial park, highlights the continued capacity expansion and concentration within premium production regions. From a valuation perspective, the sector remains at historically low levels. As of July 12, the price-to-earnings ratio of the index tracked by 华宝基金食品饮料ETF (515710) was 19.01 times, sitting near the 1.86th percentile of its 10-year range, indicating attractive medium-to-long-term investment value.

Hong Kong Hard Tech Sector Corrects

Hong Kong-listed hard tech stocks faced another significant correction. The largest and most liquid* ETF in its category, 港股通信息技术ETF华宝 (159131), experienced sustained selling pressure throughout the day, closing down 6.39% with a trading volume of 2.7 billion yuan. Despite the decline, the fund saw net subscriptions of 26 million units during the session.

Approximately 90% of the ETF's constituent stocks fell, with seven, including Kingboard Holdings, Kingboard Laminates, and GigaDevice, plunging over 10%. Among major holdings, SMIC fell 1.63%, Xiaomi Corporation closed flat, Lenovo Group dropped over 4%, and Huahong Grace declined more than 7%.

Market analysis suggests the current environment remains one of market oscillation and structural rebalancing. While AI is viewed as a long-term theme, short-term volatility may persist until more order, earnings, or commercial progress emerges to justify valuations. Non-AI sector recoveries are seen as driven more by valuation shifts and catch-up rallies from low levels, requiring fundamental catalysts for sustainability. Regarding the semiconductor sector specifically, analysis points to the start of a significant expansion cycle driven by AI computing demand, particularly for high-end memory, against a backdrop of constrained supply for general-purpose memory, pushing prices higher and leading to a structural increase in capital expenditure by global manufacturers.

港股通信息技术ETF华宝 (159131) offers concentrated exposure to Hong Kong's hard tech sector, with its underlying index comprising "80% hardware + 20% software." It holds key players in semiconductors, electronics, and computer software, including major foundries SMIC and Huahong Grace (combined weight over 26%), AI PC leader Lenovo Group (weight over 10%), and PCB leaders Kingboard Holdings and Kingboard Laminates (combined weight over 11%). The index excludes large-cap internet giants, aiming for sharper focus on the AI hardware theme.