On July 21st, the A-share market opened high and rose, with all three major indexes rising. The Shanghai Composite Index and the ChiNext Index both hit new highs this year. More than 4000 stocks in the entire A-share market rose, with over 120 stocks hitting the limit up. The major infrastructure sector has experienced a "limit up" trend, with industries such as building materials, building decoration, and steel leading the market, and sectors such as Yushu Robotics, rare earths, and ultra-high voltage also showing activity. The market turnover was 1.73 trillion yuan, a significant increase from the previous trading day. Recently, the Shanghai Composite Index has reached a new high since the end of this year, and the total market value of A-shares has continued to reach a historic high, indicating a sustained increase in market attractiveness. In terms of funds, the cumulative financing balance in the A-share market has increased by over 51 billion yuan since July. Analysts believe that the mid-term trend of the market is determined by fundamentals, but the periodic force of capital flow cannot be ignored. A-shares are gradually transforming into an incremental market, and the increase in profitability may form a positive cycle with capital inflows. On July 21st, the major infrastructure sector experienced an outbreak, with the A-share market opening high and moving high. The major infrastructure sector also saw an outbreak, with all three major indices rising. The Shanghai Composite Index briefly rose to 3560 points during trading, while the ChiNext Index approached 2300 points during trading, both reaching new highs for the year. As of the close, the Shanghai Composite Index, Shenzhen Component Index, ChiNext Index, Sci Tech Innovation 50 Index, and Beijing Stock Exchange 50 Index have risen by 0.72%, 0.86%, 0.87%, 0.04%, and 2.38% respectively; The Shanghai Composite Index closed at 3559.79 points, while the ChiNext Index closed at 2296.88 points. Both large and small cap stocks strengthened hand in hand, with the Shanghai 50 Index and Shanghai 300 Index, which are concentrated in large cap stocks, rising by 0.28% and 0.67% respectively. The CSI 1000 Index, CSI 2000 Index, and Wande Micro Cap Index, which are concentrated in small and micro cap stocks, rose by 0.92%, 1.27%, and 1.98% respectively. Small and micro cap stocks performed more actively. The transaction volume of the A-share market on that day was 1.73 trillion yuan, an increase of 133.8 billion yuan from the previous trading day. The entire A-share market saw 4005 stocks rise, 129 stocks hit the limit up, 1291 stocks fell, and 5 stocks hit the limit down. Among them, the number of stocks that hit the limit up reached a new high in over 3 months. From the perspective of the market, sectors such as major infrastructure, Yushu Robotics, rare earths, and ultra-high voltage have shown activity, while sectors such as stablecoins, CPO, and Kimi have made adjustments. In the Shenwan level industries, most industries saw an increase, with the construction materials, building decoration, and steel industries leading the way with increases of 6.06%, 3.79%, and 3.44%, respectively; Only the banking, comprehensive, computer, and home appliance industries fell, with declines of 0.77%, 0.34%, 0.31%, and 0.03%, respectively. In the construction materials sector, more than 20 stocks of Jinyu Group, Qingsong Jianhua, Wannianqing, Jidong Cement, Xizang Tianlu, Huaxin Cement, etc. rose by the limit. In the architectural decoration sector, Zhubo Design and Deepwater Planning Institute both hit the daily limit up by 20%, while multiple stocks such as CCCC Design, China Electric Power Construction, and China Energy Engineering Corporation hit the daily limit up. Most of the stocks in the building materials and building decoration sectors that hit the daily limit up belong to the large infrastructure sector. In addition, the Yushu Robot sector surged, with Changsheng Bearing reaching a 20% limit up, while Zhongdalide, Wolong Electric Drive, Jinfa Technology, and others hit the limit up. On the news front, on July 18th, the website of the China Securities Regulatory Commission showed that Yushu Technology, a leading civilian robot enterprise, has started IPO guidance, with CITIC Securities as the guidance institution. According to the coaching work arrangement, CITIC Securities will conduct a comprehensive evaluation of whether the company meets the conditions for issuance and listing from October to December this year, and assist the company in preparing the initial public offering and listing application documents in accordance with relevant regulations. Recently, the Chinese public service platform for bidding and tendering showed that Ubiquitous Technology won the bid for the robot equipment procurement project worth 90.5115 million yuan for Miyi (Shanghai) Automotive Technology Co., Ltd. Xu Guangtan, Chief Analyst of Machinery Industry at CITIC Securities, stated that Tesla's robot research and development continues to advance, Yushu Technology has completed IPO counseling and filing, and the humanoid robot industry is showing an accelerated development trend, with more catalysis in the future. Since July, the financing balance has increased by over 51 billion yuan. The sustained strength of the market in recent times cannot be separated from the continuous inflow of incremental funds. According to Wind data, as of July 18th, the financing balance of the A-share market was reported at 1.889167 trillion yuan, with a total increase of 51.018 billion yuan since July. Specifically, as of July 18th, in the 14 trading days since July, the financing balance in the A-share market has increased on 12 trading days, with only a decrease on July 4th and July 18th. From the perspective of the industry situation, since July, the financing balance of 26 out of 31 industries at the Shenwan level has increased. The net purchase amount of financing in the power equipment, computer, and non-ferrous metal industries ranks first, with 6.567 billion yuan, 6.478 billion yuan, and 6.188 billion yuan, respectively. The five industries with reduced financing balances are food and beverage, petroleum and petrochemical, textile and apparel, building decoration, and steel industries, with net financing sales amounts of 1.368 billion yuan, 504 million yuan, 311 million yuan, 218 million yuan, and 107 million yuan, respectively. From the perspective of individual stocks, since July, financing clients have increased their holdings in 220 stocks by over 100 million yuan, with New Yisheng, Dongshan Precision, Northern Rare Earth, Zhongji Xuchuang, and BYD ranking first with holdings of 1.749 billion yuan, 1.143 billion yuan, 1.12 billion yuan, 1.092 billion yuan, and 788 million yuan, respectively; The reduction amount of 70 stocks exceeded 100 million yuan, with Wuliangye, Cambridge-U, Sifang Jingchuang, BeiGene U, and Industrial Fulian leading the way with reduction amounts of 744 million yuan, 676 million yuan, 468 million yuan, 414 million yuan, and 377 million yuan, respectively. From the perspective of market performance, New Yisheng, Dongshan Precision, and Northern Rare Earth, which have significantly increased their holdings by financing customers, have all seen a sharp rise since July. Huang Kaisong, a strategic analyst at the Research Department of China International Capital Corporation (CICC), stated that we should pay attention to the current changes in the market's funding situation. On the one hand, the current stock market's return level still has good attractiveness; On the other hand, the market's capital chip structure is in a relatively rare "long position" state of the capital cost line, and the increase in profitability may form a positive cycle with the inflow of funds. Moreover, some institutions have low holdings in A-shares, which is also a potential long position in the A-share market. Gradually transitioning to an incremental market, Wind data shows that as of the close on July 21, the total market value of the A-share market was 104.40 trillion yuan, reaching a new historical high. For the A-share market, Huang Kaisong believes that the medium-term trend of the market is determined by fundamentals, but the periodic force of capital flow cannot be ignored. Combined with other factors, the A-share market index is expected to perform better in the second half of the year than in the first half. The A-share market is gradually transforming into an incremental market. In an environment of abundant liquidity, funds will constantly search for new sectors with poor expectations and consensus that can be formed in the future. Going global after the mid season report may be a new direction. ”Qiu Xiang, Chief A-share Strategist at CITIC Securities, stated that based on the mid year performance forecast, going global remains one of the strong leads to exceeding expectations. As expectations gradually stabilize after August and the mid year reporting season ends, going global may once again form a sector based market trend. Zhang Xia, Chief Strategy Analyst of China Merchants Securities, stated that currently, with the improvement of corporate profits and the deepening of industry trends, the Shanghai Composite Index has broken through resistance levels, and the market is gradually generating positive feedback of incremental capital inflows. The grand narrative of A-share market rise will gradually unfold. For market allocation, Zhang Xia suggests focusing on sectors such as electronics (semiconductors), machinery (automation equipment), pharmaceuticals (chemical pharmaceuticals), defense and military industries, non-ferrous metals (industrial metals, precious metals, small metals), and computers, taking into account multiple dimensions such as prosperity, profitability, and valuation. Qiu Xiang suggests three configuration ideas: first, industries with strong industry trend characteristics, such as AI and innovative drugs; The second is industries driven by matching performance and valuation, such as North American computing power chains in communication and electronics, non-ferrous metals, and gaming; The third is industries with certain themes and position game properties, such as military and new energy. (New Society)