The hellish month of July finally came to a close with an epic rally.
If tech stocks in the first half of the year were rockets soaring to the skies, then July saw the market take a wild roller-coaster ride.This was not a correction in any single market, but a storm that swept from Wall Street to Seoul, and from Tokyo to Hong Kong, Shanghai, and Shenzhen. To sum it up in one sentence:
The winners of the first half of the year collapsed en masse, while the losers sounded the trumpet for a comeback.
In July, global markets experienced a dramatic reversal, with Hong Kong stocks surging to the top as the best-performing market: the Hang Seng Index soared 13.13%, the Nasdaq China Golden Dragon Index rose 11.20%, and the Hang Seng Tech Index gained 7.98%, sweeping the top three spots globally.
Fund flows in July exhibited three distinct characteristics:
1. Extreme contrarian behavior: The deeper the decline, the more investors bought: The ChinaAMC STAR Market Semiconductor ETF, which fell more than 30%, saw monthly inflows of nearly 30 billion yuan, while the ChinaAMC STAR 50 ETF, down 26%, attracted over 40 billion yuan in inflows—the sharp market plunge was precisely the moment when ETF capital accelerated its entry.
2. Broad-Market Indices See Across-the-Board Inflows: The STAR 50 (67.78 billion yuan), CSI A500 (45.867 billion yuan), CSI 300 (45.410 billion yuan),CSI 1000 (45.181 billion yuan), and ChiNext Index (43.231 billion yuan) saw combined inflows of 247.4 billion yuan, accounting for more than half of the month’s total inflows and ending the six-month-long outflow trend for broad-based indices.
3. Certain low-valuation sectors gained favor: The securities companies index saw inflows exceeding 10 billion yuan in July, while the robotics sector (9 billion yuan), SGE Gold 9999 (6.5 billion yuan),Hong Kong Stock Connect Internet (6.4 billion), and Robotics (5 billion)
Meanwhile, previously popular sectors faced concentrated profit-taking: the Hang Seng Tech Index and Hong Kong Stock Connect Tech Index saw outflows of 10.8 billion and 9.2 billion, respectively, in July, and the Dividend Index also saw 2.4 billion in profit-taking after its rebound.