On June 3rd, the three major A-share indices experienced a significant pullback in the afternoon session.
At the close, the Shanghai Composite Index rose by 0.22%, the Shenzhen Component Index gained 0.73%, and the ChiNext Index advanced 1.65%.
Declining stocks outnumbered gainers across the market, with over 3,700 stocks closing lower.
The total market turnover for the day reached 3.10 trillion yuan, an increase of 347.5 billion yuan from the previous session.
Market Performance Overview
On the positive side, the market spotlight returned to the "optical" theme.
The CPO (Co-Packaged Optics) concept continued its strong performance, with Yuanjie Technology (688498.SH) surging over 15% to a new historical high, and Qingshan Paper (600103.SH) hitting the daily limit-up.
The optical fiber concept also showed repeated strength, with Hengtong Optic-Electric (600487.SH) securing its second consecutive limit-up and Yangtze Optical Fibre and Cable (601869.SH) touching the limit-up.
Activity was notable in the semiconductor supply chain, with Huate Gas (688268.SH) rising by the 20% limit, and Kangqiang Electronics (002119.SZ) and Li-On Micro (605358.SH) also touching the limit-up.
In the afternoon, the semiconductor equipment sector saw a notable surge, with Kingsemi (688037.SH) and ACM Research (Shanghai) (688082.SH) rising over 10%, followed by gains in Huarui Technology (688200.SH), Tuojing Technology (688072.SH), Guidian Co., Ltd. (603595.SH), Changchuan Technology (300604.SZ), and Fuchuang Precision (688409.SH).
Power stocks also rose in the afternoon, with Guangxi Energy (600310.SH), Jingneng Power (600578.SH), Yuneng Holdings (001896.SZ), among others, hitting the daily limit-up.
Areas of Weakness
On the downside, the AI application sector, including education, film and media, and short-drama game stocks, continued to adjust.
The AI PC concept saw partial pullbacks.
The power grid equipment concept remained in a correction phase.
Pharmaceutical and medical stocks collectively declined, while real estate, retail, and airport and shipping sectors also performed poorly.
Notable Stock Movements
Regarding key stocks, the new A-share "stock king," Lianxun Instruments (688478.SH), once surged over 10%, with its share price breaking the 2,000 yuan barrier to an intraday high of 2,071.00 yuan per share, becoming the fourth stock in A-share history to surpass the 2,000-yuan mark.
Additionally, Zhongji Innolight (300308.SZ) rose over 10% intraday, with its price reaching 1,315.51 yuan, surpassing that of Kweichow Moutai (600519.SH) and temporarily relegating Moutai to the fifth position by share price among A-shares.
Industrial Fulian (601138.SH) gained nearly 6% intraday, with its market capitalization exceeding 1.68 trillion yuan, surpassing Moutai's market cap of 1.6 trillion yuan.
Analysts believe this dual "share price and market cap" overtaking is not merely a simple sector rotation but represents an epoch-making "symphony of shifting growth drivers" in China's capital markets.
In the past, the market viewed "Moutai" as the benchmark for core assets.
Today, as the AI inference era evolves from pure computing power accumulation to the thermal and power bottleneck stage of "network connectivity and architecture," "AI enablers" represented by Zhongji Innolight and Industrial Fulian have truly become the hard-core core assets leading the times.
Market Outlook
Looking ahead, China Securities Co., Ltd. believes the short-term market has entered a critical juncture for capital rotation.
The sentiment and positioning games of high-risk capital have become relatively saturated.
From the perspective of broad-based ETF share changes, subsequent selling pressure is expected to gradually ease.
The fragility of the micro-liquidity structure suggests indices may experience technical adjustments and consolidation due to insufficient buying support.
However, this process of "flushing out weak holders → new capital rotation" could instead become a favorable opportunity to optimize capital structure and solidify the foundation for gains.
Subsequently, indices may potentially replicate an "M-shaped" path of upward movement amid volatility.
Analysis of Key Sectors
CPO Concept Maintains Strength
The CPO concept remained strong, with Yuanjie Technology surging over 15% to a new historical high and Qingshan Paper hitting the limit-up.
Commentary: On the news front, on June 2nd, during the Computex 2026 exhibition, NVIDIA CEO Jensen Huang stated in a conversation with Marvell CEO Matt Murphy that Marvell would become the next company to reach a trillion-dollar market capitalization.
Simultaneously, NVIDIA announced that its NVIDIA Spectrum-X Ethernet silicon photonics technology is now in full production.
Compared to networks using traditional transceivers, Spectrum-X technology can achieve 5 times higher energy efficiency, 5 times higher AI uptime, and deployment times that are 1.3 times faster.
Optical Fiber Concept Shows Repeated Strength
The optical fiber concept demonstrated repeated strength, with Hengtong Optic-Electric securing its second consecutive limit-up and Yangtze Optical Fibre and Cable touching the limit-up.
Commentary: On the news front, the world's first S+C+L three-band ultra-low loss multi-core optical cable line was recently officially completed and opened in Qingdao, Shandong.
This new optical cable line breaks through the transmission capacity limits of traditional optical fibers.
Semiconductor Supply Chain Remains Active
The semiconductor supply chain showed active performance, with Huate Gas rising by the 20% limit, and Kangqiang Electronics and Li-On Micro also touching the limit-up.
Commentary: On the news front, SK Group Chairman Chey Tae-won stated on June 2nd that SK Hynix plans to double its wafer production capacity within five years.
Additionally, memory manufacturer Kioxia indicated that hyperscale data centers are seeking to sign NAND contracts covering periods through 2029 and beyond.
Institutional Perspectives
China Securities: Short-term Market at Key Capital Rotation Point
China Securities Co., Ltd. believes the short-term market has entered a critical juncture for capital rotation.
The sentiment and positioning games of high-risk capital have become relatively saturated, and from the perspective of broad-based ETF share changes, subsequent selling pressure is expected to gradually ease.
The fragility of the micro-liquidity structure suggests indices may experience technical adjustments and consolidation due to insufficient buying support.
However, this process of "flushing out weak holders → new capital rotation" could instead become a favorable opportunity to optimize capital structure and solidify the foundation for gains.
Subsequently, indices may potentially replicate an "M-shaped" path of upward movement amid volatility.
Huatai Securities: Market Structure Fragility Remains Elevated
Huatai Securities stated that the fragility of the current market structure is at a relatively strong level.
Firstly, the resonance between trading proportion concentration and valuation divergence is causing rotation space to narrow.
Secondly, the overall capital flow is weak but highly concentrated, leading to a convergence in the breadth of profitable effects but a steepening of their slope.
Thirdly, leveraged funds are currently in a relatively fragile state characterized by "waning willingness to attack and high positioning."
Tianfu Securities: Index Short-term Risk Mitigated, But Trading Difficulty Persists
The market has seen a structural recovery.
On an almost flat volume basis, a very pronounced "seesaw" effect has emerged between sectors.
While indices show signs of stabilization and the tech hardware-related direction has also recovered, the market overall remains in a state of structural fragmentation.
The rotating, siphoning seesaw effect has been the market characteristic over the past two trading sessions.
Major indices have retested and held key moving average support levels.
The Shanghai Composite Index reclaimed its 60-day moving average, while the Shenzhen Component and STAR 50 indices successfully tested their 30-day moving averages.
The ChiNext Index, as the strongest index recently, also successfully held its 20-day moving average.
Overall, the short-term directional risk for indices has been mitigated.
However, the recovery in volume and sentiment, along with structural rotation, remains the primary reason for the market's high difficulty level.
The difficulty of trading in this market has not decreased.
While short-term index risks may have been alleviated, sector rotation will be the norm without a significant expansion in trading volume.
In terms of strategy, it remains advisable to control position sizes and realize short-term profits, while monitoring volume and the sustainability of trends.
One could attempt low-entry buys on dips for sectors with rotation potential.
Rotation directions to watch include the main tech hardware theme, power, defensive heavyweight sectors, and sectors driven by specific events.
Avoid chasing highs and focus on observing the sustainability of indices after retesting key support levels.
Guotai Haitong: Global Tech and Cloud Leaders Accelerating Focus on Optical Communication
Guotai Haitong Securities pointed out that from an industry trend perspective, global leading technology and cloud providers are accelerating their strategic focus on core segments of optical communication.
NVIDIA's investments in companies like LITE, Coherent, and Corning within the supply chain reflect the AI chip leader's high regard for the strategic value of high-speed optical interconnect, optical components, and advanced materials.
Simultaneously, Cloud Service Provider (CSP) companies securing key production capacity through long-term orders further strengthens the certainty of industry demand.
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