Market performance was mixed in the morning session, with the ChiNext and STAR 50 indices falling sharply in the afternoon, dragging down the broader market. The total trading volume for the day increased significantly, approaching 500 billion yuan.
China Satellite surged to its daily limit in a straight line during the afternoon session, while over 50 stocks including Tianhuan Yu, Hailanxin, Gaohua Technology, Aerospace Changfeng, and Zhongtian Rocket collectively hit their daily upper limits. Satellite-themed ETFs, such as those managed by Penghua, E Fund, GF Fund, and Fullgoal Fund, all rose by the daily limit.
In other sectors, pharmaceutical stocks staged a broad rebound, with CRO, weight-loss drugs, cell immunotherapy, and innovative drugs leading the gains. AI application concepts remained active, with film and television media, short dramas, and AI e-commerce among the top gainers; Huairui Century hit the limit-up. The non-ferrous metals sector saw a volatile intraday rebound, led by industrial metals; Shenhuo Co., Ltd. rose by the limit, followed by gains in Zhongfu Industrial, Yunnan Aluminium, Western Mining, Jiangxi Copper, and Tianshan Aluminium.
On the downside, major technology leaders experienced a broad sell-off. Key players across the AI industry chain, including Zhongji Xuchuang, Gigadevice Semiconductor Inc. (SHSE: 603986), Shenghong Technology, and VeriSilicon Microelectronics, all declined. Among them, Gigadevice saw its trading volume surpass 50 billion yuan, setting a new historical record for the stock.
Looking at individual stocks, 3,772 companies advanced, 1,678 declined, and 80 were unchanged across the two exchanges. A total of 94 stocks hit the daily upper limit, while 7 fell by the daily limit.
At the close, both major indices were lower. The Shanghai Composite Index fell 1.00% to 3,996.16 points, with a turnover of 1,563.1 billion yuan. The Shenzhen Component Index dropped 2.29% to 15,046.67 points, with a turnover of 1,808.0 billion yuan. The ChiNext Index fell 4.37% to 3,842.73 points.
Key Market Movers
Today, major capital flows were heavily concentrated in sectors such as aerospace equipment II, military electronics II, IT services II, industrial metals, and medical services. Capital outflows were seen from semiconductors, optoelectronics, communication equipment, batteries, and electronic components.
Notable Developments
1. The Long March 10B carrier rocket successfully achieved a controlled recovery of its first stage. According to the China Aerospace Science and Technology Corporation, the rocket was launched from the Hainan Commercial Space Launch Site. Approximately six minutes after stage separation, the first stage performed a vertical return and was successfully recovered on an offshore platform. This marks China's first successful controlled recovery of a launch vehicle's first stage and the world's first net-based recovery of a carrier rocket.
2. The National Energy Administration issued the "Energy Sector Energy Conservation and Carbon Reduction Action Plan (2026-2028)." The plan emphasizes advancing research and development in low-carbon, zero-carbon, and negative-carbon frontier technologies. It focuses on key areas such as the clean and efficient use of fossil fuels and the large-scale utilization of renewable energy, intensifying efforts in forward-looking and strategic major technological breakthroughs. The plan aims to accelerate breakthroughs in key technologies like supercritical carbon dioxide power generation and CCUS, tackle key technologies for flexible and efficient hydrogen production from wind and solar power and large-scale safe hydrogen storage, and break through core technologies for green hydrogen synthesis catalysis, low-carbon synthesis processes, and long-distance storage and transportation.
3. Samsung Electronics is developing a dedicated chip for AI PCs, codenamed "GAIA," and has provided prototype samples to major PC manufacturers like Lenovo and HP for performance validation, with mass production potentially starting as early as next year. According to industry sources, GAIA utilizes a 4-nanometer process and is positioned as a "memory-centric AI accelerator," with a core design philosophy of placing computing functions as close to memory as possible.
Analyst Perspectives
1. Huatai Securities Co., Ltd. (SHSE: 601688) noted that while the technology sector may see a rebound after recent overselling, it might remain in a state of high volatility until pressure from high crowding is fully digested. A potential window for long positions could emerge in mid-to-late July amid the resonance of the Chinese and US earnings seasons. Within the tech sector, it is advisable to avoid purely thematic and highly crowded areas, focusing instead on four key themes: 1) Domestic AI computing power, including the Ascend ecosystem, the domestic GPU supply chain, and actual model-side usage; 2) Memory, particularly long-term agreements, capacity expansion, and the HBM/high-end DRAM beneficiary chain; 3) Semiconductor equipment benefiting from memory capacity expansion and domestic substitution expectations; 4) MLCC, PCB, and upstream materials benefiting from AI-driven inflation.
2. Guojin Securities believes that the memory capacity expansion cycle has begun, driving up demand for semiconductor equipment. Memory chips are seeing both volume and price increases, leading to a structural uptick in global capital expenditure. On the demand side, AI computing power is driving an explosion in demand for high-end memory, with AI servers having significantly higher DRAM and NAND content than traditional servers. On the supply side, overseas memory leaders are shifting most of their advanced process capacity towards HBM and high-end DDR5, squeezing capacity for general-purpose memory. This expanding supply-demand gap is pushing up memory chip volumes and prices. In this context, overseas leaders' capital expenditures have surged significantly. Micron Technology (NASDAQ: MU) has planned capital expenditure of up to $27 billion for its 2026 fiscal year, a year-on-year increase of 70.3%. Coupled with potential continuous capacity expansion as two domestic memory companies approach IPO, global memory manufacturers' capital expenditures are undergoing a structural increase.
3. Everbright Securities suggests that looking ahead, with domestic liquidity conditions remaining accommodative and support policies for hard tech continuing to be implemented, coupled with the peak period for mid-year performance forecast disclosures, the semiconductor industry chain's performance continues to exceed expectations, reinforcing capital concentration in hard tech stocks. However, the extreme divergence across most sectors is difficult to change in the short term, and the market may still be dominated by rotational, sector-specific trends. As market risk appetite recedes, onshore capital is more inclined to cluster in sectors with earnings certainty. Driven by the resonance of high industry prosperity cycles and the domestic substitution logic, semiconductor tech growth themes with mid-year earnings support—such as memory chips, advanced packaging, GPUs, semiconductor silicon wafers, and AI computing power—have remained active against the broader trend. Additionally, crude oil had previously seen significant adjustments; with geopolitical risks in the Middle East heating up again, the oil and gas extraction sector also has expectations for a rebound. However, the core market contradiction remains the low risk appetite of capital during the mid-year earnings verification period, necessitating a continued focus on leading companies in high-growth but underperforming sub-sectors.
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