Highlights

On July 18, the A-shares saw slight gains across the three major indices, with the Shanghai Composite Index reaching a new closing high for the year. Notably,the Shanghai Composite Index increased by 0.5%, while sector performances varied, with rare earths and lithium rising and gaming and photovoltaic sectors showing volatility.

Sentiment Analysis

• The sentiment surrounding the A-shares' performance is predominantly positive, owing to the new highs achieved.
• Nevertheless, the mixed movements among different sectors introduce a degree of neutrality.
• The growth in chemical sector stocks, particularly Wanhua Chemical, adds a positive outlook. Furthermore, the successive surge in Sanwei New Materials’ stocks highlights optimistic market sentiments.
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Article Text

The Chinese stock market experienced incremental improvements on July 18, as the key indices exhibited slight upward trends. The Shanghai Composite Index ascended by 0.5%, touching a new pinnacle in 2023. Meanwhile, the Shenzhen Component Index rose by 0.37%, and the ChiNext Index followed suit with a 0.34% increase. Total transactions across the Shanghai and Shenzhen markets reached 1.5933 trillion yuan, an expansion of 330 billion yuan from the previous day.

Throughout the trading day, sector performance was uneven. Industries such as rare earths and lithium experienced gains, whereas post-noon trade saw an augmentation in aviation and power sectors. On the contrary, gaming and photovoltaic sectors vacillated at lower levels all day.

Significant movements were observed in the chemical sector, especially with Wanhua Chemicals surging over 8%, securing a closing market value of 187 billion yuan. Recent reports indicated that the domestic TDI market's average price reached 14,100 yuan per ton, marking an increase of 613 yuan per ton from the previous day, reflecting a 4.56% daily hike. This surge, surpassing 2000 yuan per ton, has been ongoing since early July, primarily driven by leading TDI producers such as Wanhua Chemical and Cangzhou Dahua.

Cangzhou Dahua, another key TDI player, now boasts a production capacity of 160,000 tons per year, claiming around 10% of the national market. The company's representatives noted the smooth operation of their TDI facilities, with a notable uptick in both domestic and international orders.

Additionally, Sanwei New Materials continued its unprecedented performance, achieving its eighth consecutive 20cm limit-up. This marks its position as the second on record to accomplish such consecutive limit-ups, following Aviation Chengfei earlier in the year. Investors speculated on the prospective acquisition of controlling shares by Zhiyuan Robotics, with potential impacts on future capital strategies.

Key Insights Table