A-share Opening Express | The three major indices opened high, Science and Technology Innovation 50 rose more than 8%

The Zhitong Finance App learned that on July 31, the Shanghai Index rose 0.76% to 3833.54 points, the Shenzhen Index rose 3.04% to 13,690 points, the GEM index rose 5.15% to 3411.61 points, and the Science and Innovation 50 rose 8.37% to 1721.36 points.

As of writing, a total of 4,076 companies in the two markets and the Beijing Stock Exchange had risen, 1,241 had declined, and 217 were flat.

The increase was highest: communication equipment, components, semiconductors, electronic chemicals, glass fiber, automation equipment, etc.; the decline was highest: white goods, banks, liquor, commercial vehicles, oil service engineering, insurance, etc.

Market conditions

The technology growth style returned strongly in early trading today. The Science and Technology Innovation 50 and GEM indices opened sharply higher. Hard technology sectors such as communications equipment, semiconductors, and components collectively strengthened. Individual stocks rose and fell less, with 21 companies rising and stopping, and the money-making effect on the market rebounded markedly. At the same time, weighted sectors such as banks, liquor, and white goods were under pressure. The banking sector, which had performed well on the previous trading day, led the decline, and capital showed signs of switching from defensive sectors to growth sectors. The turnover of the two markets increased significantly compared to the previous trading day, and market trading activity increased.

Overnight quick facts

The Politburo meeting set the tone for capital market reform: On July 30, the Political Bureau of the CPC Central Committee held a meeting to emphasize “deepening the comprehensive reform of capital market investment and financing and enhancing the resilience and confidence of the capital market”. Macroeconomic policies should work hard to improve efficiency, speed up the progress of fiscal expenditure and the use of bond funds, vigorously promote “dual” construction and “two new” tasks, and secure the bottom line of the “Three Guarantees” at the grassroots level. The conference incorporated the capital market into the macro-security barrier system, highlighting its strategic position.

The Federal Reserve kept interest rates unchanged and sent an eagle signal: The US Federal Reserve announced that it would keep the federal funds rate target range unchanged at 3.5% to 3.75%, the fifth time in a row during the year that it was “on hold”. In this resolution, three voting committees advocated a 25 basis point increase in interest rates. Federal Reserve Chairman Walsh emphasized that the 2% inflation target remains unchanged, leaving the option of further interest rate hikes in the future.

The central bank's large-scale reverse repurchase protects liquidity at the end of the month: In order to maintain stable liquidity at the end of the month, the central bank launched a 7-day reverse repurchase operation of 270.5 billion yuan and an overnight reverse repurchase operation of 600 billion yuan on July 30, with an operating interest rate of 1.40%. Since a reverse repurchase of 804 billion yuan expired on the same day, a net investment of 66.5 billion yuan was achieved in a single day, reaching a record high of over a year and a half. The central bank said it will continue to push for the reform and improvement of the monetary policy operating framework.

Trend analysis

The technology growth sector rebounded sharply at the opening of today. Science and Technology Innovation 50 opened more than 8% higher, and the GEM index opened more than 5% higher, indicating that capital was more willing to restore the growth style after a deep pullback on the previous trading day. The Politburo meeting proposed “enhancing resilience and confidence in the capital market”, and combined with many leading companies to intensively issue repurchase and increase holdings announcements, which provided some support for market sentiment. Institutional consensus favors the short-term market or the continuation of the volatile pattern. Overseas, the Federal Reserve's hawkish statement still poses external disturbances, but US stocks closed up across the board overnight, and market risk appetite was fixed. On the market, we need to pay attention to the continuation of the rebound in the technology sector and whether transactions can expand further.