A shares closing review | Four factors impact the market! A shares all fell, with over 4600 stocks in the red. Bank stocks support the market.

On July 13, the A-share market fluctuated downward all day, with over 4600 stocks in the market turning green and over a hundred stocks hitting their limit down. The total turnover for the day was 2.8 trillion, a decrease of 570.8 billion compared to the previous trading day. By the close, the Shanghai Composite Index fell by 2.06%, the Shenzhen Component Index fell by 3.48%, and the ChiNext Index fell by 3.1%. The market plummeted across the board today, with technology stocks leading the decline, and the market also experienced a significant decrease in trading volume. The reasons for the decline in the stock market can be attributed to four main factors based on comprehensive market news: 1. The sharp drop in overseas markets affecting market sentiment, with the South Korean composite index closing down by 9%, having fallen nearly 20% so far this month, and the South Korean stock market triggering the circuit breaker mechanism seven times this year. 2. Continued unrest in the US-Iran situation as the US Central Command announced new strikes against Iran, causing WTI crude oil to rise by over 5%. 3. Profit-taking in AI hardware stocks, with concept stocks in CPO, storage, PCB, etc., having accumulated significant gains previously, leading to investors cashing out to take profits. 4. An increase in quantitative trading strategies exacerbating market volatility. Data shows that as of the end of June, the scale of quantitative long stock strategies reached 1.83 trillion yuan, an increase of 1.1 trillion yuan from the beginning of the year. In terms of specific stocks, fiber optic concepts suffered heavy losses, with Hengtong Optic-Electric, Yangtze Optical Electronic, Fiberhome Telecommunication Technologies, and Shenzhen SDG Information hitting their limit down. Storage chip concepts collectively fell heavily, with GigaDevice Semiconductor Inc., Shenzhen Techwinsemi Technology, and Shannon Semiconductor Technology hitting their limit down. MLCC concepts also fell under pressure, with Guangdong Fenghua Advanced Technology hitting their limit down. Active sectors included the pharmaceutical sector showing strength against the trend, led by traditional Chinese medicine stocks, with Gansu Longshenrongfa Pharmaceutical Industry and Hangzhou Tianmushan Pharmaceutical Enterprise hitting their limit up; the banking sector fluctuated with Bank Of Suzhou rising by over 6%. The electronic special gas concept was active, with Jiangxi Jovo Energy hitting two consecutive limit up and Shuifa Gas Co., Ltd. hitting a word limit up. In terms of individual stocks, on July 13, GPU giant Muxi Stock continued to rise after the opening, with the price rising by more than 13% at one point, reaching a high of 1033 yuan per share, setting a new historical high with a market value of 400 billion yuan. Muxi's strength also led to continuous gains in Moore Threads and Cambricon. Looking ahead, Guosen believes that the upward trend in the A-share market remains unchanged, with July being an important observation window. Structurally, the growth of technology companies is expected to spread to lower levels, focusing on pharmaceuticals, finance, and natural resources. Popular Sectors: 1. The Traditional Chinese Medicine concept was active, led by Gansu Longshenrongfa Pharmaceutical Industry, with other stocks such as Jiuzhitang Co., Ltd., BIOVALLEY, GuangYuYuan Chinese Herbal Medicine, Shijiazhuang Yiling Pharmaceutical, and GRANDPHARMACEUTICAL following suit. 2. Banking stocks rose, led by Bank Of Suzhou, with China Construction Bank Corporation and Bank Of Ningbo also rising. 3. The gas sector saw an increase, with Jiangxi Jovo Energy hitting two consecutive limit up and Shuifa Gas Co., Ltd. rising by its limit, along with stocks like KAITIANGAS and Top Resource Energy following suit. Institutional Views: CITIC SEC: Focus on the recovery of some non-AI sectors CITIC SEC believes that since June, domestic AI companies have been strong independently of overseas markets, with both industrial narratives and possible effects from quantitative strategy reallocation at play. There is a need for reallocation due to excess pressure from excess returns and funding pressures, which is being achieved by increasing exposure to factors similar to "double innovation". The subjective long positions have a stronger configuration proportion and pricing power for core stocks on the ChiNext board than those led by ETFs on the STAR Market, leading to a more significant impact on the ChiNext board in the reallocation process. Overall, the K-shaped differentiation in the domestic market is mixed with too many short-term narratives and financial influences. After the cooling of fund speculation, it is necessary to focus on the recovery of some non-AI sectors. Guotai Haitong: Optimistic about the sustainability of the commercial aerospace theme market Guotai Haitong believes that looking ahead, there is increased rotation and volatility within the technology sector, with a focus on the upward adjustment of large model companies' ARR and cloud company investment expectations. They are optimistic about the sustainability of the commercial aerospace theme market and recommend focusing on three areas within this theme: the successful completion of recovery missions is expected to accelerate the low-orbit satellite networking, leading to favorable conditions for satellite payloads/communication devices/satellite assembly; the increased demand for launches will bring investment demands for launch sites and special fuel and gas infrastructure; new technologies in recycling and heavy liquid fuels. This article was reprinted from "Tencent Self-Selected Stocks", GMTEight editor: Li Fo.