Thursday (September 17), the rate hike decision landed as US Federal Reserve raised interest rates by 25 basis points. China A-shares experienced a brief surge followed by a pullback, with all three major indices closing in negative territory. Combined turnover reached 1.82 trillion yuan across the two exchanges, with more than 2,800 stocks declining. Hong Kong markets also softened as the Hang Seng Index fell 0.44% and the Hang Seng Tech Index dropped 0.34%.

Within the session, pharmaceutical stocks displayed relative strength, with the AI drug development segment carving out an independent upward trend. The tracking index for HK Stock Connect Healthcare ETF Huabao (159137), which carries nearly 70% exposure to AI pharmaceutical companies, closed 1.93% higher. Meanwhile, the benchmark index of HK Stock Connect Innovative Drug ETF Huabao (520880), heavily weighted toward innovative drug leaders actively deploying AI-powered drug discovery, gained 1.17%.

The agriculture, fishery and animal husbandry segment also outperformed the broader market, with the planting chain regaining momentum. The underlying index of Agriculture, Fishery and Animal Husbandry ETF Huabao (159275) moved up 0.89%. Market analysts suggest that as China enters its 15th Five-Year Plan period, the strategic position of the agricultural and grain industries continues to strengthen, with sector allocation logic gradually shifting toward a dual-driven model of "security plus growth".

In the technology space, despite a broad selloff, both computing power and AI application segments stayed active. The high-optics focused ChiNext Artificial Intelligence ETF Huabao (159363) tracked an index that advanced independently, with optical module makers commanding strong capital inflows. AI short-drama concepts also made a comeback in trading.

Where the market heads from here

Looking ahead, Huaxi Securities noted that September's highly anticipated FOMC meeting has concluded with a 25bp rate increase, effectively removing a major overhang for the market. With this key negative factor now largely digested, macro uncertainty has eased, opening room for A-shares to repair. In contrast to incremental improvements in macro variables, the high prosperity of the technology sector remains the core internal driver supporting the medium-to-long-term trajectory of the A-share market. Within the AI computing infrastructure arena, the long-term logic for industry growth continues to strengthen.

Multiple landmark collaborations land on the same day, igniting AI drug development

Despite weakness across Hong Kong equities, the AI pharmaceutical segment carved out its own independent rally. The tracking index for HK Stock Connect Healthcare ETF Huabao (159137), featuring nearly 70% AI pharma-related constituents, climbed as much as 2.77% intraday before closing 1.93% higher. The underlying index for HK Stock Connect Innovative Drug ETF Huabao (520880), which selects innovative drug companies actively integrating AI into their pipelines, advanced 1.17%.

Leading the charge was GenScript Biotech, the so-called "pick-and-shovel" play in AI-driven drug development, which surged more than 17% intraday to a nearly three-year high before closing 14.31% higher. Pure-play AI drug developer Insilico Medicine rose 6.86%, while AI-driven antibody discovery platform Biocytogen gained 4.27%. The AI-plus-CRO model also gathered traction, with Joinn Laboratories and Tigermed posting substantial gains.

Three major collaborations landing on September 16 fully ignited sector sentiment. Eli Lilly's TuneLab partnered with GenScript to enable scaled wet-lab validation following AI-driven design, with GenScript providing protein expression, purification and characterization services that convert AI-predicted sequences into standardized biological verification data. Separately, Novo Nordisk joined forces with Anthropic, bringing frontier large language models deeper into core drug discovery workflows. The partnership will evaluate Claude and Claude Science applications in new drug discovery and development while strengthening AI-powered software engineering. Additionally, ByteDance's AI pharma venture formally spun off into independent financing, with Anew Labs completing a $290 million first external funding round, highlighting how leading internet companies are pushing AI drug platforms from internal R&D projects toward independent industrialization and capitalization.

CMB Securities highlighted that these three events collectively underscore a global industrial trend in AI pharma: upstream capital continues flowing in, midstream general-purpose large models are entering actual drug discovery scenarios, and downstream operations require large-scale, high-quality wet-lab experiments to verify AI outputs. CITIC Securities observed that major AI firms currently focus their pharmaceutical efforts mainly on target validation and hit discovery. As model iteration drives growth in wet-lab demand, new drug modalities, molecules and targets will deliver sustained incremental opportunities downstream. If applications extend into preclinical, clinical and manufacturing stages, CROs and CDMOs stand to benefit structurally.

For investors seeking to track this accelerating industrialization trend via ETFs, two T+0 trading instruments are available: HK Stock Connect Healthcare ETF Huabao (159137), which passively tracks the HK Stock Connect Healthcare Thematic Index with AI pharma exposure approaching 70%, featuring representative constituents including XtalPi, GenScript Biotech and the WuXi trio (WuXi Biologics, WuXi AppTec, WuXi XDC), with off-exchange feeder fund code 026922; and HK Stock Connect Innovative Drug ETF Huabao (520880), which passively tracks the Hang Seng HK Stock Connect Innovative Drug Select Index with 100% allocation to innovative drug R&D companies, including Insilico Medicine, Biocytogen and CSPC Pharmaceutical Group, with feeder fund code 025221.

Regarding AI pharma concentration calculations, the HK Stock Connect Healthcare Thematic Index covers 17 AI drug development-related constituents, spanning pure AI pharma platforms, AI-plus-CRO players and innovative drug companies incorporating AI, with combined weight of 69.52%. Weight distributions show WuXi group companies commanding 39.01% combined (WuXi Biologics 18.77%, WuXi AppTec 14.70%, WuXi XDC 5.54%), GenScript Biotech at 8.15% and XtalPi at 4.02%. The Hang Seng HK Stock Connect Innovative Drug Select Index features CSPC Pharmaceutical at 9.64%, Insilico at 3.15% and Biocytogen at 0.62%.

ChiNext AI: computing power plus applications, with optical modules commanding consensus

ChiNext Artificial Intelligence staged an independent advance, with both computing infrastructure and AI application plays performing actively. On the computing power side, Jingjia Micro climbed nearly 5%, Broadex Technologies added 4.65%, and Tianfu Communication and Uniceco Data both rose more than 3%. In applications, Mango Excellent Media led gains with over 6%, while Sangfor Technologies advanced nearly 3%.

The ChiNext AI ETF Huabao (159363) saw active on-exchange trading as its benchmark index extended gains, drawing heightened attention to high-optics index positioning. Structurally, ChiNext AI equals ChiNext computing power plus ChiNext AI applications. Computing power primarily anchors optical modules, supplemented by IDC data centers and computing power leasing — optical modules handle interconnect while IDCs and leased capacity host computation. Computing delivers the fundamental infrastructure layer, applications convert that capability into productive output across industries; while computing power expands possibilities, applications unlock value.

With the rate decision delivered, market risk appetite is expected to improve, and optical modules as a strong consensus segment may attract capital inflows first. On the industry side, the recent CIOE exhibition validated high industry prosperity, Goldman Sachs raised optical module shipment forecasts, and NPO/CPO technologies continue emerging, providing new narrative catalysts for the "believe in optics" thesis.

In AI applications, short-drama concept names like Mango Excellent Media rallied broadly, warranting attention to upcoming catalysts. January through August saw 430,000 micro-dramas launched nationwide — 13 times the full-year total for last year — with AI-produced shows accounting for over 90%. National micro-drama users now exceed 800 million, with market scale projected to surpass 100 billion yuan in 2025. Looking ahead, AI applications are likely to expand from short dramas into advertising, e-commerce, gaming and education, with the investment narrative potentially shifting from theme-driven speculation toward fundamental verification.

For exposure spanning both ChiNext computing power and AI applications, ChiNext AI ETF Huabao (159363) and its feeder funds (Class A 023407, Class C 023408) concentrate on optical module and CPO leaders while maintaining AI application coverage. The underlying ChiNext AI Index features Zhongji Innolight, Eoptolink and Tianfu Communication at a combined weight exceeding 35%, positioning them as core standard-bearers of AI computing infrastructure. As of August 31, 2026, the index's top three constituents were Eoptolink (12.61%), Zhongji Innolight (11.99%) and Tianfu Communication (10.25%).

Super El Ni帽o and policy tailwinds drive planting chain limit-ups

Agricultural and fishery stocks strengthened against the broader market downturn, with the planting chain launching another offensive while select livestock names also performed well. At the close, Huaying Agriculture, Dunhuang Seed, Wanxiang Denong and Jinjian Cereals hit their daily limit-up thresholds. Shennong Seed advanced more than 8%, with Yasheng Group and Denghai Seeds also among notable gainers. The benchmark CSI ALL Agriculture Fishery & Animal Husbandry Index tracked by Agriculture, Fishery and Animal Husbandry ETF Huabao (159275) closed 0.89% higher. As of September 16, constituent weights within this index include Huaying Agriculture 0.52%, Dunhuang Seed 0.68%, Wanxiang Denong 0.43%, Jinjian Cereals 1.2%, Shennong Seed 1.25%, Yasheng Group 1.12% and Denghai Seeds 0.74%.

On the policy front, the Ministry of Agriculture and Rural Affairs recently issued the 15th Five-Year Plan for National Crop Production Development, setting targets for steady improvement in comprehensive grain production capacity by 2030 while maintaining absolute security of grain self-sufficiency and staple food supply. The plan also calls for consolidating soybean, oilseed, cotton and sugar production capacity at reasonable self-sufficiency levels, balanced supply across vegetables, fruits and tea, more precise agricultural disaster monitoring and early warning, comprehensively strengthened agricultural disaster prevention and reduction capabilities, and significant progress in high-quality planting industry development. Earlier, on September 7, the State Council issued its 15th Five-Year Plan for Accelerating Agricultural and Rural Modernization, which explicitly accelerates seed industry revitalization, cultivates a tiered system of national seed industry leading enterprises, and steadily advances commercial application of biological breeding.

Supply-side disruptions are simultaneously intensifying. The World Meteorological Organization has confirmed El Ni帽o formation with strengthening intensity, projecting development into a super-strength event with related extreme weather risks persisting into 2027. China's National Climate Center expects peak conditions around November-December this year. Analysis indicates that entering the 15th Five-Year Plan period elevates the strategic importance of agricultural and grain industries, with allocation logic evolving toward a "security plus growth" dual-driver approach. Tight global grain supply-demand balances, amplified production volatility from climate and geopolitical factors, and potential upward pressure on global grain price centers all support the sector thesis.

Valuation levels remain relatively depressed. Wind data shows the CSI ALL Agriculture Fishery & Animal Husbandry Index trading at 2.32 times price-to-book as of September 16, positioned at the 12.94th percentile over the past five years — a level offering compelling medium-to-long-term value. Looking forward, Kaiyuan Securities indicated that continued El Ni帽o intensification, potentially reaching super-strength status between the fourth quarter and year-end, elevates extreme weather risks and may periodically catalyze planting and seed industry thematic opportunities.

For broad exposure across the entire agriculture, fishery and animal husbandry value chain, Agriculture, Fishery and Animal Husbandry ETF Huabao (159275) passively tracks the CSI ALL Agriculture Fishery & Animal Husbandry Index, spanning leading pig farming enterprises while covering feed, grain planting and animal health segments. Off-exchange investors can access the theme via feeder funds (Class A 013471, Class C 013472).

Data sources: Shanghai, Shenzhen and Hong Kong exchanges, CSI Index, Guozheng Index, Hang Seng Index Company, as of September 17, 2026. Investors should note that recent market volatility may be elevated, and short-term performance does not predict future results. Please invest rationally based on personal capital conditions and risk tolerance, paying close attention to position and risk management.