According to market data, China's three major A-share indices opened higher on September 3 but then pulled back, ultimately closing virtually flat. By the close, the Shanghai Composite Index stood at 3942.09 points, up 0.02%; the Shenzhen Component Index was at 13625.12 points, up 0.10%; the ChiNext Index finished at 3312.54 points, up 0.01%; the STAR 50 Index was down 0.40% to 1611.17 points; and the Beijing Stock Exchange 50 Index fell 1.61% to 1088.75 points.

Total turnover for the Shanghai and Shenzhen markets reached 1.76 trillion yuan for the session, a reduction of approximately 32.3 billion yuan compared with the previous trading day. Across the broader market, 1,846 stocks advanced while 3,570 declined. There were 46 stocks hitting the daily upside limit and 17 hitting the downside limit, with advancing stocks accounting for roughly 33% of the total.

Where the gains were concentrated

Sector performance showed clear divergence despite the flat index close. The shipping and port sector advanced 2.99% to lead all Shenwan secondary industries, while insurance, precious metals, motors, and other power equipment also posted notable gains. On the downside, real estate services, feed, glass fiber, ground weapons, advertising and marketing, and large state-owned banks led the declines.

What drove the session

Although the three major indices finished nearly unchanged, the underlying market showed a broad decline with significant sector rotation. First, the shipping and port sector rose 2.99%, boosted by the Baltic Dry Index climbing 5.51% to 3,331 points, its highest level since December 2023. Second, the insurance sector advanced 2.58% as China's five major insurers posted combined net profits attributable to shareholders of 317.387 billion yuan in the first half, up 78.12% year-on-year, with all five having introduced interim dividend plans. Third, precious metals and industrial metals strengthened after US August ADP private payrolls data came in significantly below expectations, hitting a low since January this year. This triggered a short-term rebound in international gold prices, with Hunan Silver rising 7.81% and Baiyin Nonferrous hitting the daily limit. Fourth, thematic plays such as cultured diamonds, humanoid robots, and liquid-cooled servers remained active, with Mingshu Electric hitting the limit up and Huanghe Whirlwind rising 7.93%. Fifth, a batch of previously high-flying momentum stocks saw heavy selling and hit their daily downside limits, including Chuanzhi Education, Shenzhen Zhonghua, Yiming Food, Aili Home, and Xinsai Shares. Advancing stocks accounted for only 33% of the market.

Leading sectors in focus

1. Shipping and ports: The sector led all Shenwan secondary industries with a 2.99% gain. Haitian Development hit the daily limit, while COSCO Shipping Energy rose 8.77%, China Merchants Energy Shipping gained 8.37%, and Phoenix Shipping advanced 5.73%. The Baltic Dry Index reached 3,331 points, the highest since December 2023, amid heightened geopolitical tensions in the Middle East and rising tanker freight rates.

2. Precious metals: The sector gained 2.18%, with Hunan Silver up 7.81%, Hunan Gold rising 5.07%, Zhongjin Gold adding 4.01%, and Baiyin Nonferrous hitting the daily limit. US August ADP private payrolls data fell well short of expectations, prompting a short-term rebound in international gold prices.

3. Insurance: The insurance II sector rose 2.58%, with China Pacific Insurance up 3.69%, China Life gaining 2.94%, Ping An of China adding 2.42%, and New China Life rising 2.26%. The five major insurers posted combined first-half net profits of 317.387 billion yuan attributable to shareholders, up 78.12% year-on-year. All five have introduced interim dividend plans with combined distributions exceeding 39 billion yuan.

Underperforming sectors

Real estate services, glass fiber, feed, ground weapons, and advertising and marketing led the declines, with real estate services down 3.47%, feed falling 2.75%, glass fiber losing 2.24%, and ground weapons declining 2.16%. In terms of individual stocks, several previously popular momentum names hit their daily downside limits, including Chuanzhi Education, Shenzhen Zhonghua, Yiming Food, Aili Home, Xinsai Shares, and Jinniu Chemical. These sectors and stocks had all experienced substantial prior gains before leading the market lower on this session.