Volatility intensified in the afternoon! ChiNext Index fell more than 1.6% with increased trading volume, and popular stocks at high prices weakened across the board [Stock Market Review]

The market experienced a sharp dive in the afternoon, with the three major indices showing mixed changes. The Shanghai Composite Index hit a new intra-year high during the trading session, while high-flying stocks like Dongxin Heping collectively plummeted. The total trading volume on the Shanghai and Shenzhen stock exchanges reached 1.84 trillion yuan, an increase of 41.1 billion yuan from the previous trading day. On the futures / futures market, hot topics were rather scattered, with more stocks declining than rising. Over 3,500 stocks across the market fell. Film and television stocks collectively surged, with Xingfu Lanhai achieving three consecutive 20CM limit-up boards. Oil and gas stocks oscillated and strengthened, with Qianneng Hengxin rising over 10%. Infant and child concept stocks rebounded, with Beingmate achieving a limit-up board. By the close of trading, the Shanghai Composite Index rose 0.17%, the Shenzhen Component Index fell 0.77%, and the ChiNext Index dropped 1.62%.

In terms of sectors,

film and cinema stocks remained strong throughout the day. Xingfu Lanhai achieved four 20CM limit-up boards in five days, while Jinyi Film and Television, Ciwen Media, Beijing Culture, Shanghai Film Group, and Enlight Media led the gains. News-wise, as of 15:00 on July 29, the total box office revenue for the 2025 summer movie season (from June to August) had exceeded 5.5 billion yuan. Among them, "Nanjing Photo Studio" stood out with exceptional performance. Since its official release on July 25, the film's market popularity has continued to soar, with box office revenue exceeding 600 million yuan in just five days.

China Post Securities stated that as the summer movie season progresses, the film market is entering the most critical peak viewing period of the year. After a period of market adjustment, the summer movie season's box office data is expected to significantly improve with the release of multiple blockbuster films, sending positive signals for a comprehensive recovery in the film industry. However, it should be noted that the film and television sector has actually experienced several consecutive days of gains. The current situation of a comprehensive spread to mid- and lower-tier stocks may be seen as a signal of sentiment reaching a climax. Therefore, it is anticipated that the market may experience some differentiation in the future. Thus, it is still advisable to focus on the most core front-runner stocks in this direction.

Oil and gas stocks oscillated and strengthened, with Qianneng Hengxin rising over 10%, and Keli Petroleum, Tongyuan Petroleum, Zhunyou Petroleum, and Shouhua Gas leading the gains. News-wise, on July 29 local time, international oil prices closed sharply higher. The most-traded contract for NYMEX crude oil futures briefly approached $70 per barrel during the trading session, closing with a gain of nearly 4%.

Dongwu Futures pointed out that the traditional peak consumption season and diesel shortages can support the market in resisting supply increases in the short term, with the market sentiment remaining strong amid short-term supply-side disruptions. However, the long-term outlook remains bearish, which will become increasingly evident after the peak season ends. Attention should be paid to OPEC+'s September production policy.

Infant and child concept stocks rebounded, with Beingmate, Yangguang Dairy, and Taimusi achieving limit-up boards, while Qishi Dairy, Runyang Technology, and Kangzhi Pharmaceutical leading the gains. News-wise, the State Council Information Office held a press conference at 14:00 today to introduce the childcare subsidy system and childbirth support measures. Infants born after January 1, 2022 who meet the eligibility criteria can receive childcare subsidies.

Market-wise, despite yesterday's jump initially and then pull back in infant-related concept stocks, some individual counters still managed rapid capital-driven rebound repairs, indicating sustained market recognition for this theme. Beyond film and infant concepts, retail, F&B, and tourism segments within the broader consumption sector also showed localized activity. Compared to already elevated pharmaceutical and computing hardware sectors, consumption plays' relative valuation advantages stand out. Should capital rotation toward laggards materialize, catch-up opportunities within consumption stocks remain noteworthy.

Stock performance

High-momentum thematic stocks saw intensified divergence today. Stablecoin concept stocks led declines, with Dongxin Peace and Bank of China Securities hitting limit-downs, while Tianyang Tech, SDIC Intelligence, CNPC Capital, and Hengbao also ranked among top losers. The rare earth permanent magnets sector likewise faced adjustments, with Shenghe Resources and Huahong Tech both sliding over 8%. Additionally, high-profile counters like Construction Industry, Tuoshan Heavy Industry, and China Tungsten High-tech closed limit-down.

Conversely, consecutive limit-up stocks showed recovery signs. Beyond Tibet Tourism extending the height to 8 boards, only one of yesterday's eight 2-board stocks closed lower, lifting the advancement rate above 60%. Some consumption stocks also began attracting capital inflows, with film, infant (dairy), and retail segments active during today's session, suggesting gradual rotation toward undervalued plays. Against this backdrop, low-position stocks exhibiting abnormal volume and strength may become focal points.

Outlook

Indices plunged intraday before partial buy-side support emerged, leaving only the SSE marginally higher while the recently strongest ChiNext Index dropped over 1.6% on heavy volume. Index-wise, following today's high-volume afternoon divergence, tomorrow's movement proves critical. Timely recovery could sustain the fluctuating uptrend, whereas extended pullbacks may heighten near-term consolidation risks, warranting corresponding risk controls.

Futures market perspective, although negative capital feedback emerged in some high-profile stocks today, potentially curbing chase sentiment, core heavyweight counters in computing hardware and innovative pharmaceuticals maintained relative strength at close. Full sentiment retreat appears unlikely, leaving structural opportunities during thematic rotation.

Market highlights

1. CPC Politburo: Enhance domestic capital market attractiveness and inclusiveness, consolidate stabilization momentum

The CPC Politburo meeting on July 30 emphasized continued risk prevention and resolution in key areas. Implement the spirit of the Central Urban Work Conference and carry out high-quality urban renewal. Actively and prudently resolve the debt risks of local governments, strictly prohibit the addition of new hidden debts, and vigorously, orderly, and effectively promote the exit of local financing platforms from the market. Enhance the attractiveness and inclusiveness of China's domestic capital market and consolidate the momentum of its stabilization and improvement.

2. Political Bureau of the CPC Central Committee: Regulate Disorderly Competition Among Enterprises in Accordance with Laws and Regulations, and Promote Capacity Management in Key Industries

The Political Bureau of the CPC Central Committee held a meeting on July 30, which pointed out the need to unwaveringly deepen reforms. We should adhere to scientific and technological innovation to lead the development of new quality productive forces, accelerate the cultivation of emerging pillar industries with international competitiveness, and promote the in-depth integration of scientific and technological innovation and industrial innovation. We should advance the construction of a unified national market, and continuously optimize the order of market competition. Regulate disorderly competition among enterprises in accordance with laws and regulations. Promote capacity management in key industries. Standardize local investment attraction behaviors. Adhere to the "two unwavering principles" and stimulate the vitality of various business entities.