Report Summary 1. Report Industry Investment Rating - Not provided in the given content 2. Core Views - The recent sharp decline of the Shanghai Composite Index after hitting 3700 points was due to some funds taking profits. However, the medium - term outlook remains optimistic as continuous capital inflows will drive the stock market upward. The trend of global non - US dollar asset allocation is deepening, with many central banks increasing their holdings of RMB and euro assets. RMB assets, especially RMB bonds, have become a preferred allocation for international investors. The view of investors towards the Chinese market has become more positive, while the Indian stock market has fallen out of favor [1][2]. 3. Summary by Relevant Catalogs 3.1 Market Review - On Thursday, the Shanghai Composite Index hit 3700 points and then tumbled. The trading volume of the two markets reached 2.15 trillion yuan, showing a rapid increase. Among the indices, the CSI 1000 Index closed at 6976 points, down 87 points (-1.24%); the CSI 500 Index closed at 6429 points, down 78 points (-1.20%); the SSE 50 Index closed at 2829 points, up 16 points (0.59%); the CSI 300 Index closed at 4173 points, down 3 points (-0.08%). In the industry and theme ETFs, chip - related ETFs led the gains, while aerospace - related ETFs led the losses. In the two - market sector indices, the sports, insurance, and semiconductor indices led the gains, while the ground military equipment, components, and energy metals indices led the losses. The settlement funds of CSI 300 and SSE 50 index stock index futures had net inflows of 1500 million and 700 million yuan respectively [1]. 3.2 Important Information - In July, non - banking financial institutions had a net increase of 2.14 trillion yuan in RMB deposits, while household RMB deposits decreased by 1.11 trillion yuan, indicating that household savings are flowing into the stock market at an accelerated pace. The National Data Bureau stated that China's digital infrastructure is world - leading in scale and technology, with 4.55 million 5G base stations and 226 million gigabit broadband users by the end of June, and the total computing power ranks second globally. According to a UBS survey, many central banks have been increasing their holdings of RMB and euro assets this year, deepening the global trend of non - US dollar asset allocation. The Indian stock market has fallen from the most favored Asian market to the least popular one among fund managers, while investors' view of the Chinese market has become more positive. The Tianmen government in Hubei Province offers rewards, subsidies, and free services worth up to 287,000 yuan for two - child families and 355,000 yuan for three - child families. The International Energy Agency reported that global oil supply is expanding significantly, and demand growth has slowed to less than half of that in 2023, leading to a serious imbalance in the market. The demand for Japanese five - year government bond auctions hit a record low since 2020, and the 10 - year government bond had no transactions for the first time in over two years. The Japanese CPI has exceeded the central bank's 2% target for over three years, and some central bank governors suggest a shift in inflation - monitoring indicators, which may pave the way for an interest - rate hike in October. Market investors are betting on a Fed rate cut through various means, and the probability of a Fed rate cut in September has risen to 100% [1][2]. 3.3 Market Logic - The recent sharp decline of the Shanghai Composite Index was due to some funds taking profits. The global trend of non - US dollar asset allocation is deepening, and RMB assets have become a preferred choice for international investors. The worst period of the economic cycle is passing, and the attractiveness of stock allocation has significantly increased as households shift from excessive savings to normal savings [2]. 3.4 Market Outlook - The short - term sharp decline of the Shanghai Composite Index at the 3700 - point mark does not affect the medium - term optimism. The continuous inflow of funds will drive the stock market upward. The Chinese humanoid robot industry is iterating products at an amazing speed, and its commercialization path is becoming clearer. The global financial asset re - allocation trend of "de - Americanization" is expected to accelerate the inflow of international funds into the A - share market [2]. 3.5 Trading Strategies - For stock index futures directional trading, the short - term volatility at the 3700 - point mark of the Shanghai Composite Index does not affect the medium - term upward trend. For stock index option trading, with continuous capital inflows, investors can consider buying out - of - the - money long - term call options on growth - oriented stock indices [2].