The Market Is Entering the Second Phase of a Bull Run

Regarding Tuesday’s A-share rally, E Fund Australia analyzed two key drivers:

1. Policy Support for Innovative Drugs: China’s medical insurance bureau recently proposed leveraging医保 data to boost R&D of innovative drugs, encouraging pharmaceutical firms to expand innovation breadth/depth, fueling gains in the healthcare sector (especially innovative drugs).

2. Shanghai’s AI Push: On July 28, Shanghai announced measures to expand AI applications, including issuing ¥600 million in computing vouchers and lowering smart-computing costs to accelerate domestic AI ecosystem development.

External Factors:

• The U.S. and EU reached a new tariff deal (15% on EU exports), reducing trade uncertainty and indirectly boosting risk appetite.

• China-U.S. trade talks in Stockholm saw constructive discussions on economic relations and macro policies, with both sides agreeing to extend tariff suspensions for 90 days.

Institutional Insights:

• Bosera Funds: China’s H1 GDP growth of 5.3% demonstrated resilience, weakening the U.S.’s leverage in using economic sanctions.

• GF Securities’ Wu Jiaxiang: The market is entering Phase 2 of the bull cycle, with capital inflows creating a “inflow→rally→more inflow” feedback loop. A weak USD and domestic policy support may further improve expectations. If PPI recovery lifts earnings outlooks, foreign capital回流 could strengthen. The Shanghai Composite may target its October 2023 high of 3,674 mid-term.