A-share Closing Review | Three Major Indices Bounce Back with Decreased Volume, Pharmaceutical and Biotechnology Stocks Surge to Limit Up, Precious Metals Strengthen

On August 20, after opening higher, the A-shares experienced a peak followed by a decline, with the increase narrowing down; the three major indices slightly closed in the green. By the end of trading, the Shanghai Composite Index rose by 0.24% to 3903.72 points, the Shenzhen Component Index increased by 0.59% to 13972.78 points, the ChiNext Index gained 0.64% to reach 3495.59 points, while the Sci-Tech 50 fell by 0.87% to 1652.97 points, and the BSE 50 decreased by 0.06% to 1081.58 points. The total trading volume of the Shanghai and Shenzhen markets was approximately 20,793.63 billion yuan, a decrease of about 431.7 billion yuan compared to the previous trading day. In the entire market, 4,096 stocks rose, 1,347 fell, with 84 hitting the ( refers to stocks hitting the daily limit up), and 13 hitting the ( refers to stocks hitting the daily limit down), meaning approximately 73% of the stocks increased in value. In terms of sectors, the top gainers included biopharmaceuticals (+7.85%), precious metals (+5.50%), medical devices (+4.27%), medical services (+4.24%), internet e-commerce (+3.18%), and tourism and scenic spots (+3.05%); while the largest declines were in coking coal II (-4.01%), kitchen and bathroom appliances (-1.40%), minor metals (-1.08%), and batteries (-0.84%). Additionally, the new stock N Green Control Transmission debuted on the ChiNext, closing up 282.24% at 32.49 yuan, with an issue price of 8.50 yuan. Driving Factors On that day, the three major indices opened high, then reached a peak and retreated, with the Shanghai Composite Index rising by 0.24%, the Shenzhen Component Index by 0.59%, and the ChiNext Index by 0.64%. The Sci-Tech 50 dropped by 0.87% and the BSE 50 dropped by 0.06%, with a trading volume of about 2.08 trillion yuan, decreasing by approximately 431.7 billion yuan from the previous day. In the biopharmaceutical sector, on August 19, Merck and Moderna announced preliminary positive results from the Phase III clinical trial of their jointly developed mRNA personalized cancer vaccine, intismeran autogene, reaching all dual primary endpoints. Moderna surged 176.97% in a single day, and Merck rose 12.6%, reaching an all-time high, driving A-share vaccine, innovative drugs, and CRO sectors to strengthen across the board. In the precious metals sector, on August 19 local time, the London spot gold price jumped 4.35% to 4521.87 USD/ounce, and spot silver rose 5.79% to 66.98 USD/ounce, both hitting historical highs, prompted by the U.S. Treasurys announcement to expand long-term Treasury bond repurchase scales, a decline in U.S. bond yields, and a weakening dollar. In the grid equipment sector, on August 18, the State Grid signed a strategic cooperation framework agreement with the Southern Power Grid to implement the "14th Five-Year Plan" and accelerate the construction of a new type of grid. In the first half of the year, the State Grid completed fixed asset investments exceeding 310 billion yuan, a year-on-year increase of 12.6%. Overnight, the three major U.S. stock indices halted their decline and rebounded, with the Dow Jones rising by 0.22%, the S&P 500 up by 0.21%, and the NASDAQ increasing by 0.16%. In Popular Sectors 1. Biopharmaceuticals Vaccine, innovative drugs, and CRO stocks surged, with the Shenwan biopharmaceutical sector rising by 7.85%, medical services rising by 4.24%, and medical devices by 4.27%. Companies such as Changchun Bcht Biotechnology, MGI Tech Co., Ltd., Shanghai Universal Biotech, Porton Pharma Solutions, Chongqing Lummy Pharmaceutical, Walvax Biotechnology, and CanSino Biologics Inc. all hit their ( refers to stock limit up). The catalyst for this was the positive results from the Phase III clinical trials of Merck and Modernas mRNA personalized cancer vaccine, with Moderna soaring 176.97% overnight and Merck rising by 12.6%, reaching an all-time high. 2. Precious Metals Gold stocks strengthened across the board, with the Shenwan precious metals sector up by 5.50%. Shandong Gold Mining rose by 8.59%, Chifeng Jilong Gold Mining increased by 7.91%, followed by Zhongjin Gold Corp., Ltd. and Beijing XIAOCHENG Technology Stock. The catalyst was the 4.35% rebound in London spot gold above 4500 USD, and spot silver rose by 5.81%, both hitting historical highs. 3. Grid Equipment The grid equipment sector was active, with Changshu Fengfan Power Equipment hitting the for 14 days in a row, and Zhejiang Chint Electrics also reaching, accompanied by SMS Electric and Jiangsu Yangdian Science & Technology rising. The catalyst was the signing of a new grid construction strategic cooperation framework agreement between the State Grid and Southern Power Grid, with the State Grid's fixed asset investment exceeding 310 billion yuan in the first half of the year, representing a year-on-year growth of 12.6%. Sectors Under Adjustment Coking coal II, kitchen and bathroom appliances, minor metals, and batteries were among the sectors that saw the most significant declines, with coking coal II dropping 4.01%. Coking coal II had previously surged 7.56% on the previous trading day, topping the Shenwan industry growth rankings, but reversed to lead the declines on this day. These sectors had all seen substantial increases previously, and on this day they experienced significant declines, indicating a clear sector rotation in the market.