Market Overview - On July 31, the A-share market opened lower and experienced wide fluctuations, with the Shanghai Composite Index finding support around 3580 points[2] - The Shanghai Composite Index closed at 3573.21 points, down 1.18%, while the Shenzhen Component Index closed at 11009.77 points, down 1.73%[7] - Total trading volume for both markets was 19,621 billion yuan, above the median of the past three years[3] Sector Performance - Strong performers included banking, software development, internet services, and consumer electronics, while coal, steel, energy metals, and shipbuilding sectors lagged[3] - Over 70% of stocks in the two markets declined, with chemical pharmaceuticals, software development, and internet services showing the largest gains[7] Valuation Metrics - The average price-to-earnings (P/E) ratios for the Shanghai Composite and ChiNext indices are 14.81 times and 41.76 times, respectively, indicating a mid-level valuation compared to the past three years[3] - The market is currently in a dual-driven phase of policy and capital, establishing a slow upward trend despite short-term technical adjustment pressures[3] Economic Context - China's economy continues to show moderate recovery, with consumption and investment as core drivers[3] - Long-term capital inflows are increasing, with steady growth in ETF sizes and continuous inflow from insurance funds, providing significant support[3] Investment Recommendations - It is suggested to focus on technology growth and cyclical manufacturing as dual main lines for investment, while also considering high-dividend banks, public utilities, and strategic emerging industries[3] - Short-term market expectations lean towards steady upward fluctuations, with close monitoring of policy, capital, and external market changes advised[3]