As Stocks Rebound, Different Capital Is Flowing Into Different Sectors (AI Translation)
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This article was translated from Chinese using AI. The translation may contain inaccuracies. Click the button on the right to hide or reveal the original version.
2025年7月24日，江苏海安，股民查看当日A股收盘行情。图：视觉中国
文｜财新周刊 全月
By Caixin Weekly Quan Yue
盛夏7月，A股持续单边火热的上涨行情。
In the height of July's midsummer, China's A-shares market continued its unabated rally, posting a sustained and robust upward trend.
从2025年7月17日起，上证指数仅用五个交易日便从3500点迅速拉升100点，股市整体活跃度明显抬升，全市场单日成交额从1.5万亿元随之稳定在1.8万亿元，资金回流活跃。7月23日以来的连续五个交易日，上证指数盘中触及或收盘站稳3600点，距离2024年“十一”假期后的首个交易日短暂站上3600点，已过去近300天。
Starting from July 17, 2025, the Shanghai Composite Index surged by 100 points in just five trading days, rapidly climbing from 3,500. Market activity saw a marked uptick, with total daily turnover across the market rising from RMB 1.5 trillion and stabilizing at RMB 1.8 trillion, signaling lively capital inflows. For five consecutive trading days since July 23, the index has either touched or closed above 3,600 during intraday trading. It has been nearly 300 days since the index last briefly touched 3,600 points on the first trading day following the National Day holiday in 2024.
2024年“9·24”的政策大礼包推动A股此轮上涨。当时，无论是货币政策中的降准降息、刺激地产行业的降低存量房贷利率和首付比例，还是增量长期资金入市，“组合拳”在出台时机和强度上超出市场预期。
The “September 24, 2024” policy stimulus package served as the catalyst for the most recent rally in China’s A-share market. At the time, measures including cuts in reserve requirement and interest rates under monetary policy, reductions in existing mortgage rates and down payment ratios to boost the real estate sector, as well as the introduction of new long-term capital into the market, collectively formed a comprehensive set of tools whose timing and scale surpassed market expectations.
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Caixin is acclaimed for its high-quality, investigative journalism. This section offers you a glimpse into Caixin’s flagship Chinese-language magazine, Caixin Weekly, via AI translation. The English translation may contain inaccuracies.
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As Stocks Rebound, Different Capital Is Flowing Into Different Sectors (AI Translation)
Explore the story in 30 seconds
- Shanghai Composite surged from 3500 to above 3600 within July 2025, backed by strong policy support and daily trading volume rising from RMB 1.5 to 1.8 trillion.
- The rally was mostly driven by capital inflows, margin leverage, and ETF investments, despite listed company earnings growth lagging; dividend payout rates and retail investor participation increased.
- Banking stocks outperformed as institutional and insurance funds favored high dividends and stability, while traditional high-dividend sectors underperformed; future risk remains if macro expectations shift.
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Who’s Who
- Industrial Securities
兴业证券 - Industrial Securities is an investment firm whose research reports are cited in the article. Specifically, an Industrial Securities research report indicated that as of July 15, 2025, 43.29% of A-share companies showed positive preliminary earnings.
- China International Capital Corporation
中金公司 - CICC published a research report noting that from 2022 to 2024, China's household savings increased significantly, with new deposits totaling 48.8 trillion yuan, far exceeding nominal GDP growth. This highlights the potential for household savings to become a significant source of capital for the stock market.
- Soochow Securities
东吴证券 - Chen Gang, an analyst at Soochow Securities, published a research report. He stated that the "dividend style" market trend is driven by two types of capital: long-term dividend-focused funds, such as insurance capital, and short-term speculative trading funds. The former prioritizes stable dividend income due to the bond-like nature of dividend assets.
- Guotai CSI Steel ETF
国泰中证钢铁ETF - Guotai CSI Steel ETF attracted significant investor interest, with a weekly net inflow of 1.42 billion yuan. This indicates a strong preference for cyclical industries amidst the "anti-involution" investment theme, showcasing its role in attracting considerable capital.
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What Happened When
- September 24, 2024：
- Chinese authorities announce a major policy stimulus package including reserve requirement and interest rate cuts, mortgage rate and down payment reductions, and introduction of new long-term capital.
- After National Day holiday in 2024：
- Shanghai Composite Index briefly touches 3,674.40 points before retreating.
- By end of Q1 2025：
- Insurance companies' managed funds reach RMB 34.93 trillion, of which RMB 2.82 trillion is in stocks; insurance capital holdings in bank stocks reach 27.821 billion shares (value: 265.78 billion yuan).
- First half of 2025：
- New A-share accounts reach 12.6 million, up 32.77% from the same period in 2024.
- First trading day after Qingming Festival in April 2025：
- Shanghai Composite Index opens with a steep drop, at one point falling below 3,050 points.
- April 3, 2025：
- Trump administration announces reciprocal tariffs on all global trading partners.
- April 4, 2025：
- Chinese government announces counter-tariffs against the United States in response to US actions.
- April 7, 2025：
- First trading day after Qingming Festival; Shanghai Composite Index falls below 3,100, hits low of 3,040.69, closes with 7.34% loss.
- April 7, 2025, 14:45：
- Central Huijin Investment ('national team') announces new round of ETF purchases, vowing to increase holdings and support the market.
- April 7, 2025：
- Stock-based ETFs see net inflows of RMB 69.18 billion.
- April 8, 2025：
- Stock-based ETFs see net inflows of RMB 106.30 billion; as of close, 174 listed firms announce buybacks and share increases over 10 billion yuan.
- April 9, 2025：
- Market sentiment stabilizes; Shanghai Composite surges 116 points.
- May 1-5, 2025：
- May Day holiday period.
- May 12, 2025：
- China and the US announce the 'Geneva Joint Statement on Economic and Trade Talks,' including mutual tariff reductions and a 90-day suspension.
- June 12, 2025：
- Israel launches attack on Iran, sparking rally in military-industrial stocks.
- June 23-25, 2025：
- Shanghai Composite Index breaks through multiple resistance levels, briefly approaching the 3,500-point mark.
- June 23-29, 2025 (week starting June 23)：
- Margin financing sees inflows exceeding 182.2 billion yuan.
- June 24, 2025：
- Israel and Iran reach ceasefire agreement; military-industrial stock momentum continues.
- July 15, 2025：
- Percentage of A-share companies issuing positive 2025 semi-annual outlook remains at decade low; 1,518 out of 5,307 listed companies have disclosed their 2025 interim results or forecasts.
- July 17, 2025：
- Start of five-day rally; Shanghai Composite surges by 100 points from 3,500.
- July 18, 2025：
- Shanghai Composite closes at 3,534, a new one-year high.
- July 21-25, 2025：
- Net subscriptions to iShares MSCI China ETF grow by $355 million.
- July 23, 2025：
- Shanghai Composite Index decisively breaks through 3,600 points intraday.
- July 23-29, 2025 (five consecutive trading days since July 23)：
- Shanghai Composite touches or closes above 3,600 during intraday trading.
- July 30, 2025：
- Political Bureau of the Communist Party of China Central Committee holds meeting, urges measures to enhance capital market attractiveness. Shanghai Composite closes at 3,615.72 after an intraday high of 3,636.17.
- As of July 30, 2025：
- 21 instances of insurance companies increasing their stakes, nearly half in the banking sector.
- End of July 2025：
- Margin trading accounts for 10% of A-share turnover, near its year-to-date peak; retail weekly net inflow rises to 133.7 billion yuan.
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