Changpeng Wan
Market Momentum Gains Strength
Recent trading sessions have revealed compelling positive signals across China’s A-share markets. On July 23rd, despite volatility during closing hours, multiple major indices surged to recent highs – a clear indicator of strengthening market confidence. The Shanghai Composite Index briefly surpassed 3600 points, marking its highest level since October 2024.
Trading Volume Surge
The momentum coincides with dramatically increased activity across exchanges:
- Combined Shanghai-Shenzhen-Beijing exchange volume exceeded 1.9 trillion yuan on July 22
- Daily turnover increased by hundreds of billions compared to early July figures
- Financing transactions reached 200.9 billion yuan – highest since March 2025
Margin Trading Activity Accelerates
Market revitalization continues significantly through enhanced margin trading. By July 21:
- Financing balances surged past 1.9 trillion yuan threshold
- Margin debt accumulation increased steadily after 3-month consolidation
- Selling balance stabilized between 130-140 billion yuan
The resurgence demonstrates growing investor participation in leveraged positions.
Structural Market Divergence
Despite broad gains, significant sector differentiation continues shaping investment outcomes.
Sector Performance Gap
Analysis by Shenwan industry classification reveals:
- Banking stocks dominated with +60% YTD returns
- Metals/Telecom/Home appliances delivered +30% growth
- Food/Coal/Real estate underperformed below +10%
International Monetary Fund research confirms such divergence characterizes maturing emerging markets.
Stock Volatility Patterns
Notable price fluctuations defined individual securities:
- Over 3,000 stocks doubled from 2024 lows
- 100+ equities achieved 5-fold surges
- 1,000+ counters experienced 50%+ corrections from peaks
Chen Jianhua from Yintai Securities notes:
证券时报记者采访中银泰证券策略分析师陈建华(Chen Jianhua)
“The convergence trend reflects intensified capital competition where sentiment dominates short-term pricing – though our mid-term analysis confirms gradual pricing efficiency improvements.”
Valuation Efficiency Improvement
The market demonstrates maturing characteristics with notable indicators:
- Mid-term cumulative returns show narrowed fluctuation bands
- Fundamental outperformance becomes increasingly decisive
- Excessive speculation declines proportionally
As strategist Chen Jianhua elaborated: “Competitive enterprises now sustainably outperform weaker counterparts – validating our gradual pricing normalization thesis.”
Sustainable Bullish Outlook
Multiple drivers support continuing momentum:
- 5.3% H1 GDP growth establishes strong baseline
- Regulatory anti-involution measures stabilize profit projections
- Capital market reforms stimulate institutional participation
Global monetary restructuring enhances China’s comparative advantages. Foreign capital rebalancing toward RMB-denominated assets creates sustained inflow pressure.
Strategic Implications for Investors
The emerging pattern suggests methodological repositioning:
- Monitor banking/metals/tech sectors showing strongest momentum
- Review portfolio volatility tolerance amid ongoing corrections
- Evaluate fundamentally sound companies outperforming indices
Upcoming disclosures from long-term institutional investors may provide strategic reallocation signals. Active engagement with broker analysis through platforms like Shenzhen Stock Exchange remains essential. As financial infrastructure strengthens through recent Securities Times regulatory coverage initiatives, these positive indicators merit vigilant observation.
