Global market sentiment was influenced by the uncertain prospects of U.S.-Iran peace talks, shaking the confidence of Wall Street bulls. Despite a sharp drop in oil prices, major U.S. stock indices closed largely flat on Wednesday. On May 28, China's major indices experienced a volatile session, dipping before recovering. The ChiNext Index was the first to turn positive, despite having fallen nearly 2% intraday, while the STAR 50 Index continued its strong performance.
By the midday close, the Shanghai Composite Index was down 0.14%, the Shenzhen Component Index fell 0.26%, the ChiNext Index rose 0.21%, and the STAR 50 Index gained 1.29%. The combined turnover for the Shanghai and Shenzhen markets in the morning session was 1.78 trillion yuan, a decrease of 285.4 billion yuan from the previous trading day.
Sector-wise, the power concept continued its strong performance, with stocks like Ningbo Energy and Huadian Energy hitting the daily limit-up. The lab-grown diamond concept saw a surge, with Huanghe Whirlwind and SF Diamond rising by the limit. Upstream materials for PCBs, including MLCC, copper-clad laminates, copper foil, and electronic cloth, saw broad gains, with companies like Fenghua Advanced Technology and Wogene Photoelectric hitting the limit-up. The semiconductor industry chain, encompassing IGBT, power supply chips, and the SMIC concept, remained active, with stocks such as Huamel Electronics reaching the limit-up. Computing hardware concepts like optical modules, PCBs, and optical fiber cables also rose, with Coretronic Technology and Yunnan Chihong Zinc & Germanium among the limit-up gainers. Coal stocks continued their upward trend, with Haohua Energy hitting the limit-up.
On the downside, humanoid robotics concepts, including Yushu Robotics, dexterous hands, and reducers, continued to decline, with Zhongma Transmission approaching the limit-down at one point. The AI comic drama concept saw a brief surge followed by a sharp drop, with Kunlun Tech falling over 5%. Major financial sectors, including securities, banking, insurance, and internet finance, continued to weaken. The baijiu and major consumer concepts also experienced a short-lived rally, with Jinzigu Liquor dropping over 7%. AI application concepts like AI programming and AI agents continued to trend lower. Lithium battery concepts, including lithium hexafluorophosphate, fluorochemicals, lithium resources, and lithium iron phosphate, saw a broad decline. Pharmaceutical concepts such as CRO, innovative drugs, and weight-loss drugs remained weak. Computing localization and computing rental concepts continued to fall. Concepts like glass substrates, PPO resin, minor metals, gold, and solid-state transformers were collectively weak.
Looking ahead, China Securities believes the short-term market is likely to exhibit "moderate index volatility with accelerated style rotation." The market's focus may shift from previous growth areas like AI computing to lower-tier consumption, power, and semiconductor localization, indicating a phase of sector migration.
**Hot Sectors**
**1. Semiconductor Industry Chain Rebounds** The semiconductor industry chain experienced a volatile recovery, with Guofeng New Material, Yida Co., and Kangda New Material hitting the limit-up. Huahong Company surged nearly 15%, setting another historical high. *Commentary: On the news front, Taiwan Semiconductor Manufacturing plans to increase quotes for its 3-nanometer wafer foundry services again in the second half of 2026, with hikes potentially reaching up to 15%, and a further 5% to 10% increase possible in 2027.*
**2. Lab-Grown Diamond Concept Surges** The lab-grown diamond concept saw a sharp rise, with SF Diamond and Huanghe Whirlwind hitting the limit-up. *Commentary: Reports indicate that diamond-copper composite materials have recently achieved large-scale application at the Zhengzhou Supercomputing Center, improving chip module heat transfer capacity by 80%. This marks the first large-scale adoption of such materials in the country.*
**3. Power Sector Gains Against Market Trend** The power sector strengthened against the broader market trend. Huadian Energy marked its fourth consecutive limit-up, Yue Dianli A its second, while stocks like Huitian Thermal Power and Gansu Energy also hit the limit-up. *Commentary: On May 27 at 13:44, Guangdong's power grid load reached a new annual high of 165.93 million kilowatts, a 0.61% year-on-year increase. This peak occurred nearly two months earlier than in previous years.*
**4. Real Estate Sector Shows Activity** The real estate sector was active, with Tianjian Group hitting the limit-up, and stocks like Rong'an Real Estate, Jintou Chengkai, and Dalong Real Estate following with gains. *Commentary: Guangzhou recently held a press conference on supporting documents for its "Implementation Opinions on Further Promoting the Stable and Healthy Development of the Real Estate Market," explicitly proposing support for residents to "sell old and buy new" through special subsidies and market-based purchases of second-hand homes.*
**Institutional Views**
**China Securities: Short-term Market Likely to Show "Moderate Index Volatility with Accelerated Style Rotation"** Looking forward, close attention should be paid to the substantive driving strength of Changxin Technology's IPO approval on the memory industry chain, and whether hot money exiting high-priced tech sectors will form new, sustained hotspots in consumption and power. Overall, the short-term market is likely to exhibit "moderate index volatility with accelerated style rotation," with the market focus potentially shifting from previous growth areas like AI computing to lower-tier consumption, power, and semiconductor localization.
**Eastmoney Securities: Technology Remains a Relatively Certain Main Theme for the Year** Chen Guo, Chief Strategist at Eastmoney Securities, stated in a research report that after the significant gains from the "normalization trade + earnings season rally," market divergence on structure is increasing. Some funds are seeking structural rebalancing and rotation, manifesting as corrections in previously high-flying hot sectors like AI computing (optical modules, memory), with some capital choosing to take profits stage-wise. Chen judges that from a medium-term perspective, the triple high-growth logic of AI industry capital expenditure, order fulfillment, and earnings realization remains unchanged. Coupled with the K-shaped economic differentiation reinforcing the profit advantage of the tech sector, technology remains a relatively certain main theme for the year. It is advisable to avoid high-priced themes where previous gains have been excessive, and prioritize deploying in hardcore sub-sectors with high certainty in industry prosperity, solid order performance, and relatively lagging previous gains.
**Guosheng Securities: Starship V3's First Flight Validates Core Capabilities; SpaceX Listing Could Herald a New Era for Commercial Space** The accelerated listing process of SpaceX, combined with the continuous iteration of the Starship series, is reshaping the global competitive landscape and valuation system of commercial spaceflight. Its leading spillover effects are expected to resonate within the A-share industry chain. On the investment side, it is recommended to first focus on high-barrier, early-performance realization links in the upstream industry chain, specifically selecting high-quality enterprises deeply tied to national team constellation projects, possessing irreplaceable technological barriers, with capacity reserves highly matching orders in hand, and those directly benefiting from the accelerated deployment of Starlink.
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