The Shanghai Composite Index opened higher and climbed throughout the morning session on the 21st, while the ChiNext Index rallied in the final stretch of trading. By the close, the Shanghai Composite rose 0.97%, the Shenzhen Component Index gained 0.65%, and the ChiNext Index advanced 0.8%.

Sector rotation was rapid during the session. The pharmaceutical sector exploded with multiple limit-up stocks, including Nanhua Biological (rights protection) hitting its third consecutive limit-up, Baihua Pharmaceutical (rights protection) achieving a 3-day, 2-limit-up pattern, and stocks like Xinhua Pharmaceutical, Harbin Pharmaceutical, and Jinan Protein all surging to their daily limits. In the financial sector, Nanhua Futures and Huajin Capital jumped directly to limit-up. The real estate sector strengthened rapidly intraday, with names like Wo Ai Wo Jia and Financial Street hitting limit-up. On the downside, precious metals concepts underperformed, with Shanjin International and Chifeng Gold declining. Total trading volume on the Shanghai and Shenzhen exchanges reached 2.03 trillion yuan, down 45.6 billion yuan from the previous session, with more than 4,500 stocks advancing across the market.

A-Share's Highest-Priced Stock Dives; Shengu Group Plunges Over 30%

Today (September 21), Lianxun Instrument, the highest-priced stock on the A-share market, fluctuated downward in the morning session and accelerated its decline in the afternoon, at one point losing more than 7%. By the close, its loss remained above 5%. Meanwhile, other recently listed high-priced stocks generally performed poorly, with hard-tech newcomers like Pinzhun Laser, Yushu Technology-W, Muxi Co., Ltd.-U, Hengdong Optoelectronics, and Suoyuan Technology-U all falling in tandem.

Additionally, C-Shengu, previously dubbed the "meme stock" by the market, delivered another extreme roller-coaster session. Its call auction opened with a sharp 48% drop, but after the open, the stock quickly rebounded, with losses narrowing to 32.49% to 39 yuan — up 30% from the opening price, triggering a temporary trading halt. By the close, it was down 34.71%.

Analysts point out that the simultaneous weakness in Lianxun Instrument and hard-tech newly listed stocks is mainly due to overly rapid previous gains and valuation overextension, combined with reduced trading volume prompting capital rotation from high to low positions in pharmaceuticals, financials, and real estate, leading to concentrated profit-taking. The extreme volatility in C-Shengu further exposes the loose share structure and sentiment-driven characteristics of new listings. Investors should remain vigilant about valuation normalization, liquidity discounts, and lock-up expiry risks for high-priced stocks. If earnings fail to meet expectations, it could trigger negative feedback across the sector, and investors should not blindly chase rebounds.

Pharmaceutical and Biotech Sector Sees Wave of Limit-Ups

Among today's major A-share sectors, pharmaceuticals and biotech were the strongest performers. Multiple stocks, including Huaren Pharmaceutical, Novogene, and Tousa Life, hit their 20% limit-up. On the policy front, the Ministry of Industry and Information Technology, along with the National Development and Reform Commission and ten other departments, jointly issued the "15th Five-Year Plan for the Development of the Pharmaceutical Industry." The plan calls for actively cultivating and expanding the innovative drug and medical device industry, focusing on key areas such as oncology, autoimmune diseases, metabolic diseases, cardiovascular diseases, and neurological disorders, while ramping up R&D, production, and application of innovative drugs and devices to accelerate the creation of blockbuster products that expand industry scale.

Notably, the plan explicitly proposes improving the long-term mechanism for medical insurance support of innovative drugs and perfecting an independent innovative drug catalog. The first edition of the "Commercial Health Insurance Innovative Drug Catalog" has been launched, covering 19 high-value innovative drugs, establishing a two-tier payment system of "medical insurance for basics, commercial insurance for innovation," stabilizing corporate cash flow and earnings expectations. Regarding innovative drugs, Guosen Securities stated that domestic sales in the innovative drug sector are growing rapidly, while overseas markets are about to enter a dense commercialization phase. Most domestic innovative drug companies have entered the stage of medical insurance volume expansion for major products, driving rapid revenue growth. Innovation going global 2.0 is also set to reap rewards, as Kelun-Biotech's partner Merck announced that the global Phase 3 clinical trial TroFuse-005 for sac-TMT met its primary clinical endpoint and is expected to file for FDA approval in the second half of the year. Products such as Keymed Biosciences/Lepu Biopharma's CMG901 and Hutchison China MediTech's savolitinib have also met primary endpoints in global Phase 3 trials. Chinese innovative drugs are making progress in overseas clinical development and are about to enter global commercialization.

Seizing the Final Offensive Window of the Year

Looking ahead for the A-share market, CITIC Securities believes that in the latter stages of the industrial super cycle, after institutional stocks peak, there is typically a wave of new highs in non-institutional stocks. The current AI narrative, earnings cycle position, and global monetary environment tend to constrain institutional stocks: First, AI computing power investment has not slowed, but market expectations for the commercialization space of frontier model makers are being adjusted; second, full-A non-financial earnings may continue to rise sequentially in Q3 2026, but the year-on-year growth peak may occur in Q4 of this year; third, the Federal Reserve has shown a hawkish stance on inflation control, which will at least create a tighter macro liquidity atmosphere this year. Viewing these factors through an institutional lens undoubtedly limits the height of the rally. However, from the perspective of short-term sentiment and the chip cycle, combined with the catalyst of Q3 earnings reports, the market has the soil for active capital to attack new technologies and new themes. It is recommended to actively seize the final offensive window of the year.

Bank of China International Securities believes that in the short term, ahead of the National Day holiday, capital is inclined to wait and see, and the market will likely remain in a range-bound bottoming phase in the near term, with a rebound expected in Q4. For A-shares, denominator-side disturbances are nearing an end, but no clear inflection point has emerged in numerator-side industry prosperity. The overall A-share market is transitioning from systematic upside to a phase of divergence and alpha-seeking. Specifically: On the numerator side, AI industry chain capital expenditure and expectations remain on an upward trajectory, but free cash flow among leaders is beginning to diverge — hardware segments are relatively stable, while the application layer is under more obvious pressure. The AI industry trend remains intact, but quality differentiation has begun — shifting from "sector beta" to "cash flow quality alpha" is the inevitable direction. From a cycle positioning perspective, the domestic economy is transitioning from active to passive inventory restocking, high growth on the numerator side is entering its late stage, valuation drag is rising, and style shifts cannot rely on growth stabilization exceeding expectations — only true prosperity can serve as an anchor.