CSI 300 fell 5.26%
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A-shares are currently in an attempted rebound phase, but the major indexes weakened markedly again this week, indicating that the rebound still lacks a solid foundation and the market has not yet formed an effective reversal signal. The SSE Index(000001) fell 5.81% this week, breaking below its 5-day, 10-day, 20-day, 50-day, and 200-day moving averages, and is now 6.21% below the 200-day moving average. The CSI 300(000300) fell 5.26% and is likewise trading below both short- and medium-term moving averages across the board. Growth stocks came under heavier pressure: the Shenzhen Index(399001) fell 8.90% this week, while the ChiNext(399006) dropped 10.78%. Although the ChiNext remains well above its year-to-date low, it has approached the 200-day moving average, suggesting that risk unwinding in high-beta segments has been more concentrated.
The drag from overseas markets on sentiment has eased somewhat, but it has not provided clear support. The Nasdaq Composite(0NDQC) fell 1.52% this week, while the S & P 500 Index(0S&P5) declined only 0.55%, both much milder than the losses in A-shares. The Hang Seng Index(HSI), meanwhile, rose 1.6%, showing relatively stable short-term performance. However, U.S. tech-sector trading volume remained below the 50-day average, indicating that risk appetite is still cautious and external markets have not yet delivered strong upward momentum.
On the macro front, U.S. inflation data has eased temporarily, but policy expectations remain constrained by labor-market and energy-price factors. U.S. June CPI, not seasonally adjusted, came in at 3.5% year on year, below the expected 3.8% and the prior 4.2%. June CPI on a month-on-month basis was -0.4%, significantly weaker than the expected -0.1%, suggesting that short-term price pressure has eased. At the same time, initial jobless claims for the week ended July 11 were 208,000, still below expectations, showing that the labor market remains relatively strong. June retail sales rose 0.2% month on month, in line with expectations, indicating that consumption has not slowed sharply. EIA crude inventories fell by 1.692 million barrels, a smaller draw than expected, but with repeated geopolitical tensions and rising expectations of U.S. sanctions related to Iranian and Russian energy, uncertainty in the energy sector remains high. For the Federal Reserve, easing inflation improves the outlook for rate hikes, but the combination of labor-market resilience and energy disruptions means policy is unlikely to quickly shift toward significant easing.
Domestic policy continues to emphasize “stabilizing growth, expanding domestic demand, and structural adjustment,” with a continued bias toward pro-growth and countercyclical measures. The central bank’s aggregate financing to the real economy increased by RMB 20.84 trillion in the first half, and RMB loans rose by RMB 10.72 trillion. It also stressed stronger countercyclical and cross-cycle adjustments and carried out RMB 1.4 trillion in outright reverse repo operations, indicating that liquidity support is still being sustained. GDP grew 4.7% year on year in the first half, and industrial value added above designated size rose 5.4%, showing that the economy remains in expansion. However, total electricity consumption across society rose only 3.7% year on year in June, down from 6.9% previously. Combined with weak real-estate sales and new-start data, this suggests that domestic-demand recovery remains uneven. Policies such as the “15th Five-Year Plan” to expand consumption, the Premier’s remarks at a symposium on cultivating new consumer growth drivers, and measures related to urban renewal and natural resource management all point to continued policy efforts in the second half of the year around growth stabilization, domestic-demand expansion, and the development of new growth themes. Monetary policy remains accommodative, but the emphasis is increasingly on structural optimization and transmission efficiency rather than broad-based liquidity flooding.
Industrial policy remains focused on three main directions: AI infrastructure, digital security, and green transformation. The carbon-peaking action plan has brought data centers and AI infrastructure into the emissions-control framework, implying that compute expansion is shifting from simple scale-up toward a balance of energy efficiency and constraints. The World Artificial Intelligence Conference also continued to highlight industry progress, reinforcing market attention to the long-term AI theme. At the same time, cybersecurity, domestic substitution, and digital software services have received both policy and industry catalysts, making them more likely to attract phased capital allocation when market style is defensive.
In terms of sector performance, funds have clearly rotated toward more defensive areas, indicating that risk appetite has not materially recovered. The top-performing sectors this week were Food-Dairy Products(G2020IG.CN), Energy-Coal(G1319IG.CN), and Retail-Drug Stores(G5912IG.CN), with weekly gains of 5.13%, 4.57%, and 4.29%, respectively. Food-Dairy Products strengthened, reflecting a preference for stable-demand consumer staples that are less sensitive to economic fluctuations. The rise in Energy-Coal was driven by recurring geopolitical tensions, lingering energy-price disruptions, and continued attention to the sector’s high-dividend characteristics. Retail-Drug Stores also ranked near the top, suggesting that, amid domestic-demand expansion policies and resilient healthcare consumption, pharmaceutical retail has some defensive allocation value as well. The current leadership structure has shifted from earlier high-beta technology growth to low-volatility sectors such as consumer staples, resource dividends, and pharmaceutical retail, showing that the market remains in a defensive allocation mode. Investors are placing greater weight on earnings certainty and cash-flow stability, and the market has not yet entered an offensive phase led by high-growth, high-prosperity sectors.
This week, the Top 33 portfolio fell an average of 18.44%, with only 1 stock rising and 32 declining, reflecting a sharp pullback in the strong-stock universe and broad-based internal selling pressure. The best-performing stock was Emdoor Information Co Ltd(001314), which rose only 0.28% for the week, showing some resilience in a broadly weak market. The company mainly develops, designs, manufactures, and sells notebooks, tablets, and other smart hardware. Its favorable drivers are more related to industry digitization, rugged terminals, and specialized equipment demand. It has an O’Neil Score of 79, an RS Rating of 91, an EPS Rating of 66, and an industry rating of 32, indicating that the company operates in a relatively favorable industry and that its stock price strength is also notable. However, its Acc/Dis Rating is only B, suggesting that institutional money flows have not been very sustained recently. In the current market environment, even stocks with high relative strength still need stronger price-volume confirmation and better capital support.
From a market-structure perspective, this looks more like a weak recovery attempt after a decline than a confirmed trend reversal. Major indexes are generally below their medium- and long-term moving averages, growth sectors are among the biggest losers, and the Top 33 names have experienced widespread drawdowns, all of which indicate that high-beta areas have not yet completed their risk repricing. Key signals to watch going forward include: first, whether the SSE Index and CSI 300 can reclaim their 10-day and 20-day moving averages; second, whether trading volume can continue to expand during the rebound rather than showing only a one-day spike; and third, whether the leading sectors can broaden from defensive themes to more earnings-supported core industries. In terms of positioning, it is still advisable to avoid chasing strength too aggressively, focus first on stocks with high sector rankings, strong relative strength, and improving capital inflows, and wait for clearer evidence of a reversal.
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published on July 17, 2026