What happened
In August, the A-share market experienced a repair rally, with the Shanghai Composite Index climbing 4.02% for the month. This narrowed its cumulative decline since July to 2.64%.
Excluding new listings, the average gain across all stocks reached 9.3%, while the median gain was 6.5%. A total of 4,125 stocks posted monthly gains, accounting for nearly 76% of the market.
Among the nearly 3,000 stocks that fell in July, 794 have fully recovered their losses, a repair ratio of about 27%. The rebound was led by sectors such as general equipment, auto parts, special equipment, chemical products, and chemical pharmaceuticals.
Why it matters
The broad-based recovery — with nearly three-quarters of stocks rising — suggests investor sentiment is improving despite the index remaining below its July peak. The significant share of July losers bouncing back may indicate rotational buying or bottom-fishing in beaten-down names.
The fact that five stocks that fell more than 40% in July have already recouped all losses highlights how selective the recovery has been, with stronger momentum in specific industries rather than a uniform rebound across the market.
Key facts
The Shanghai Composite Index rose 4.02% in August, reducing its cumulative decline since July to 2.64%.
Excluding new stocks, the average gain was 9.3% and the median gain was 6.5%; 4,125 stocks rose, nearly 76% of the market.
Of nearly 3,000 stocks that fell in July, 794 recovered, a repair ratio of 27%.
Sectors with the most recovering stocks included general equipment, auto parts, special equipment, chemical products, and chemical pharmaceuticals.
Among 425 stocks that fell over 40% in July, five — Kent Co., Hengdongguang, Liwei Micro, Weiergao, and Tengjing Technology — fully recovered.
What to watch next
Investors may watch whether the repair rally broadens beyond the leading sectors, or if the 27% recovery ratio among July losers continues to climb in coming months.
The performance of the five deeply beaten-down stocks that have fully recovered could offer clues on whether aggressive buyers remain active in high-risk names.