Market Performance Review - The A-share market experienced a rise followed by a decline, with all major indices closing down after the Politburo meeting, where the CSI 1000 had the smallest drop of 0.54%, while the CSI A50 and CSI 300 fell by 2.48% and 1.75% respectively [3][12] - There was a noticeable divergence in market styles, with growth and consumption sectors experiencing smaller declines, while financial, stability, and cyclical styles saw significant pullbacks [3][12] - Mid-cap and small-cap indices outperformed large-cap indices during the week, with the NING and MAO indices, representing core assets and growth leaders, also declining, with the NING combination down 1.74% and the MAO index down 0.84% [3][12] Investor Sentiment and Market Outlook - The personal investor sentiment index has continued to decline, entering a negative zone, with the 7-day moving average reported at -0.42% as of August 2, down from 4.35% on July 26 [4][19] - The recent Politburo meeting did not indicate any large-scale stimulus plans, suggesting that the focus will shift back to demand recovery rather than potential supply-side reductions [4][32] - The current market dynamics indicate a potential vacuum in buying momentum, necessitating a cautious approach to investment strategies [4][32] Sector Analysis - The healthcare and communication sectors saw gains of over 2%, driven by significant partnerships and strong performance in the CPO sector, respectively, indicating a return to prosperity trading [15] - Conversely, sectors such as coal, non-ferrous metals, construction materials, and steel experienced substantial declines due to the withdrawal of "anti-involution" trading sentiment following policy announcements [15] Investment Strategy and Recommendations - The report emphasizes a return to prosperity trading, highlighting opportunities for valuation recovery in technology growth sectors, particularly in AI applications, computing power chains, and optical modules [5][33] - The fundamentals of innovative pharmaceuticals and CROs are showing signs of transformation, with continued trading logic for Chinese pharmaceuticals going overseas [5][33]