A-Share Market Overview: Mixed Performance with Pharmaceuticals Leading the Way

On July 1, 2025, the A-share market experienced a mixed performance with the three major stock indices showing varied results. The Shanghai Composite Index (Shanghai Index) demonstrated strength in the morning, driven by a rally in banking stocks. By the afternoon, a recovery trend emerged, leading to a positive close for the Shenzhen Component Index. The overall market saw the Shanghai Composite Index rise by 0.39% to 3457.75 points, while the ChiNext Index fell by 0.24% to 2147.92 points. The Shenzhen Component Index edged up by 0.11% to 10476.29 points, and the ChiNext 50 Index declined by 0.86% to 994.8 points.

Trading Volume and Stock Movements

The total trading volume across the Shanghai and Shenzhen markets reached 14,661 billion yuan, a slight decrease from the previous day’s 14,868 billion yuan. The Shanghai market saw a trading volume of 5,536 billion yuan, down from 5,671 billion yuan, while the Shenzhen market recorded 9,125 billion yuan in trades. Among the stocks, 2,628 rose, 2,542 fell, and 247 remained unchanged. Notably, 89 stocks surged by more than 9%, while 12 declined by the same margin.

Banking and Pharmaceuticals Lead the Charge

Banking stocks made a strong comeback, with several banks hitting historical highs. Construction Bank (601939) and Industrial and Commercial Bank of China (600000) led the gains, while Suzhou Bank (002966) surged over 5%. In the pharmaceutical sector, stocks like Shanhe Yafu (300452) and Fengyuan Biotechnology (688221) reached or exceeded 10% gains, with Shanhe Yafu hitting the daily limit.

Sector Highlights

  • Banking Sector: After two days of adjustments, banking stocks rebounded significantly, with several banks reaching new highs.
  • Pharmaceuticals: The sector saw a strong afternoon rally, with Shanhe Yafu and other pharmaceutical stocks leading the gains.
  • Utilities: The utilities sector performed well, with stocks like Huadian Liaoning (600396) and Huayin Power (600744) hitting the daily limit.
  • Technology: The technology sector faced declines, with companies like Jidai Technology (300546) hitting the daily limit.
  • Retail: The retail sector underperformed, with stocks like Cuimei Group (603123) hitting the daily limit.

Market Outlook

Analysts from Dongguan Securities noted that the Shanghai Composite Index’s recovery above the 5-day moving average indicates a stabilizing upward trend. Despite ongoing global macroeconomic and geopolitical uncertainties, the resurgence of global rate-cut expectations has expanded liquidity and improved risk appetite. This has boosted market sentiment and increased the expectation of economic recovery, suggesting potential for further gains.

Shanhe Yafu’s Surge

Shanhe Yafu (300452) reached the daily limit, marking its first such surge in over a year. The company, a leading supplier of oral solid dosage pharmaceutical excipients in China, offers over 50 product varieties, including fillers and disintegrants. This performance is attributed to its strong market position and strategic focus on innovation and import substitution.

Chemical Pharmaceuticals Continue to Rise

The chemical pharmaceutical sector continued its upward trend, with Shanhe Yafu and Lingkang Pharmaceutical reaching the daily limit. Other stocks like Beilu Pharmaceutical and Hanyou Pharmaceutical also saw significant gains, reflecting positive sentiment in the sector.

Overall, the market showed signs of resilience and potential for further growth, driven by key sectors like banking and pharmaceuticals.