On the morning of June 29th, the three major A-share indices showed mixed performance. By the midday close, the Shanghai Composite Index had risen by 0.17%, the STAR Composite Index gained 0.36%, while the Shenzhen Component Index fell 1.21% and the ChiNext Index dropped 1.28%.

Across the broader market, over 1,900 individual stocks advanced. The innovative drug sector experienced a comprehensive surge, with the CRO concept segment skyrocketing by 7%. The consumer sector saw a notable rebound, with stocks in liquor, soft drinks, and food sectors experiencing volatile upward movements, and the hog farming sector remaining active.

In contrast, concept sectors like PCB and glass substrates led the declines, while lab-grown diamonds and rare earths sectors fell.

Key Drivers for the Pharmaceutical Rally

The morning session witnessed a powerful rally in the innovative drug sector across both A-shares and Hong Kong markets, with over 20 individual stocks hitting their daily upside limits. The CRO concept led the charge with a 7% gain.

On the A-share front, stocks such as Bairen Medical, Wanbang Pharmaceutical, Guangsheng Tang, and Shutaishen all surged by the 20% limit. Numerous other pharmaceutical companies, including Haisco, Pharmaron, Kelun Pharmaceutical, Shuanglu Pharmaceutical, Yatai Pharmaceutical, Xinhua Pharmaceutical, Taiji Group, Kangyuan Pharmaceutical, and Tailong Pharmaceutical, also reached their daily limit-up prices.

In Hong Kong, BeiGene rose over 10%, Baili Tianheng jumped 12%, WuXi AppTec climbed 6%, and Jiangsu Hengrui Medicine gained more than 8%.

The catalyst for the move was an announcement from the National Healthcare Security Administration. The agency published a preliminary list of drugs that have passed the initial review for inclusion in the 2026 national reimbursement drug list and the commercial health insurance innovative drug directory. A total of 557 drugs passed the initial review for the basic medical insurance list, and 54 passed for the commercial insurance list.

Authorities noted that a significant portion of the applications were for new drugs, with 343 being new chemical entities approved within the last five years. This reflects the vigorous development of China's pharmaceutical industry and the increasing number of new drug approvals.

Analysts from Guojin Securities commented that the fundamentals of China's innovative drug sector continue to improve while valuations remain at low levels, enhancing its investment appeal. They expect many innovative drug companies to enter a period of earnings realization as their global clinical pipelines become more competitive and reimbursement policies increasingly favor innovative therapies.

Bohai Securities pointed out that recent share buybacks by several listed pharmaceutical companies have boosted market confidence and signaled perceived undervaluation. The firm is optimistic about the sector's bottoming-out recovery and maintains a positive long-term outlook on the development trend of domestic innovative drugs.

Consumer Sector Stages a Rebound

In early trading, the consumer sector staged a significant rebound. Stocks related to baijiu (Chinese liquor), soft drinks, and food were in positive territory.

Kweichow Moutai rose over 3%, Shanghai Bairun Investment Holding Group hit the limit-up, while stocks like Jiangsu Yanghe Brewery Joint-Stock, Anhui Yingjia Distillery, and Chongqing Brewery followed with gains.

Research reports indicate that the stabilization of Moutai's wholesale prices reflects effective inventory adjustments in distribution channels. By shifting focus towards direct consumer sales and coordinated price management, companies are expected to see improved financial performance starting in the second quarter. Data from the recent "618" online shopping festival showed a 25% year-on-year increase in alcohol sales on JD.com, with leading brands like Moutai and Wuliangye achieving growth between 15% and 45%, with prices remaining stable.

Dongpeng Beverage surged 9%, while GuaiBao Pet Food and Babifood both gained over 5%.

Additionally, the hog farming sector moved higher again. Juxing Agriculture & Animal Husbandry reached the limit-up, Muyuan Foods jumped 6%, and stocks like Shennong Group and Dongrui Shares posted notable gains. Reports suggest several companies have recently set new targets for reducing hog production capacity, with some bringing forward their planned timelines for herd reduction.