China A-shares rebound on August 7 as STAR Market jumps 3.35%

China's A-share market staged a broad rebound on August 7, reversing the previous session's split and choppy trade as all four major benchmark indices closed higher. The Shanghai Composite Index rose 1.02% to 3,940.04, reclaiming the 3,900-point level, while the Shenzhen Component Index gained 1.42% to 14,311.01, the ChiNext Index added 1.35% to 3,563.12, and the STAR Composite Index led with a 3.35% jump to 2,019.44. Trading activity strengthened, with combined turnover on the Shanghai and Shenzhen exchanges reaching 2.66 trillion yuan, up 135.6 billion yuan from the prior day, and more than 2,800 stocks advanced. Healthcare and pharmaceutical names became the market's main engine, with medical services, innovative drugs and CRO (Contract Research Organization) shares accelerating in the afternoon. Porton Pharma Solutions, Bide Pharmatech and Shanghai Model Organisms Center were among stocks that hit the 20% daily limit-up, helping drive a sector-wide rally. Precious metals also attracted capital in afternoon trade, while PCB, memory chip, electronic chemicals, energy metals and rare earth permanent magnets ranked among the stronger themes. The gains contrasted with profit-taking in several of the previous day's leaders. Diversified financials were among the few declining segments, with Cuivei Shares, Aijian Group and Lakala Payment leading losses, while software development, gaming, real estate and coal stocks also corrected. The sharp swing followed August 6, when the Shanghai Composite edged up 0.57% to 3,900.35, the Shenzhen Component and ChiNext fell 0.24% and 0.55%, and the STAR Composite rose 1.25%. Coal, electronic chemicals and seed-industry concepts had led that session, while pharmaceutical stocks broadly weakened. The one-day reversal points to fast sector rotation as indices trade at relatively elevated levels, with investors simultaneously chasing momentum and taking profits. Turnover had fallen to 2.53 trillion yuan on August 6, down 130.9 billion yuan from the prior session, suggesting caution after the market's advance. The rebound to 2.66 trillion yuan on August 7 suggests stronger market absorption and a quicker return of off-market capital, helped by the wealth effect in pharmaceutical shares. The durability of these sector moves is likely to remain a central market focus.

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