The three major A-share indices opened mixed on July 1st. Early trading saw a divergence in performance, with strength in Shanghai and weakness in Shenzhen, yet most individual stocks rose. The afternoon session brought a pullback, with losses on the ChiNext board widening.
Looking at the market sectors, large financials were strong, led by brokers and insurance. Pharmaceutical and agricultural stocks surged, while coal, chemicals, and real estate also posted notable gains. Themes like fintech, AI applications, humanoid robots, and lithium mining were active. In contrast, the photovoltaic and computing hardware supply chains experienced adjustments.
At the close, the Shanghai Composite Index was up 0.44% at 4,112.45 points. The Shenzhen Component Index fell 0.53% to 16,119.17 points, and the ChiNext Index declined 1.89% to 4,260.72 points.
Wind data shows a total of 4,325 stocks across the two main boards and the Beijing Stock Exchange rose, while 1,145 fell, and 54 were flat.
Total trading volume for the Shanghai and Shenzhen markets reached 3,660 billion yuan, an increase of 386.3 billion yuan from the previous session's 3,273.7 billion yuan. Specifically, Shanghai's volume was 1,698.5 billion yuan, up 168.2 billion, and Shenzhen's volume was 1,961.5 billion yuan.
According to DZH VIP, 252 stocks across the markets rose by more than 9%, while 23 fell by more than 9%.
Brokerage Stocks Lead Gains, Communications Sector Declines
Among sectors, agriculture, forestry, animal husbandry, and fisheries surged significantly. Langyuan Co., Ltd. (300175), Joyvio Food Co., Ltd. (300268), Xiaoming Agricultural Stock Co., Ltd. (300967), Aonong Biological Technology Co., Ltd. (603363), Xiangjia Co., Ltd. (002982), and New Hope Liuhe Co., Ltd. (000876) were among over ten stocks that hit the daily limit-up or gained over 10%. Dongxing Securities noted the sector is currently in a phase of price consolidation, where competition revolves around breeding costs and operational quality. The sector's PB valuation is at a historical low, and investors still have differing views on the extent of capacity reduction and potential upside. As the pig farming industry stands at an inflection point with improving supply-demand dynamics, accelerated capacity reduction has begun to materialize. The swine sector is expected to gradually strengthen with continued capacity reduction, and Dongxing maintains a recommendation for left-side investment opportunities in pig farming.
Brokerage stocks led the market higher, with the non-bank financial sector posting strong gains. Tianfeng Securities Co., Ltd. (601162), Guosheng Securities Co., Ltd. (002670), Huaan Securities Co., Ltd. (600909), and COFCO Capital Holding Co., Ltd. (002423) hit the daily limit-up, while China Merchants Securities Co., Ltd. (600999) and Changjiang Securities Co., Ltd. (000783) rose over 8%.
Commercial retail also performed well. Xinxunda (300518), You-A Co., Ltd. (002277), Zhejiang Winter Sun Co., Ltd. (600113), Jinhe Commercial Management Co., Ltd. (603682), Ningbo Zhongbai (600857), and Yonghui Superstores Co., Ltd. (601933) hit the limit-up or gained over 10%.
The communications sector led declines. Zhongtian Technology Co., Ltd. (600522), Zhaolong Interconnection Technology Co., Ltd. (300913), Yongding Co., Ltd. (600105), Tongding Interconnection Information Co., Ltd. (002491), Changxin Boke Technology Co., Ltd. (300548), and Hengtong Optic-Electric Co., Ltd. (600487) all fell more than 6%.
Power equipment stocks underperformed. Sungrow Power Supply Co., Ltd. (300274) dropped over 10%, while Ginlong Technologies Co., Ltd. (300763), Hyper Strong (688411), Hope Electric Co., Ltd. (603063), and Sungrow (300693) declined more than 6%.
The electronics sector turned lower before noon. Suzhou Tianmai Technology Co., Ltd. (301626), Fullshare Technology Co., Ltd. (688662), and Hengyunchang (688785) fell over 10%, while MDK (688079), Kaisheng Technology Co., Ltd. (600552), and Zhongfu Circuit (300814) dropped more than 8%.
Structural Trends in A-Shares Persist
Dongxing Securities believes the structural market trend in A-shares will continue. In the first half of 2026, the A-share market displayed a standard K-shaped structural pattern characterized by weak index divergence, extreme sector fragmentation, and a complete separation in profitability. There is no foundation for a broad-based rally; all excess returns are concentrated in the hard-tech manufacturing sector, while traditional economic sectors continue to underperform, resulting in significant divergence in market gains. For the second half of 2026, the firm remains firmly optimistic about AI-related tech stocks as the core market theme. The K-shaped structure of rising new momentum and declining old momentum is expected to see the gap widen and then contract in stages over the coming period. The upward trend for tech stocks remains intact, but with technological iterations and continuous investment, tech stocks may experience periodic adjustments. Concurrently, funds may briefly flow into low-priced non-tech stocks, leading to short-term convergence of the K-shaped gap. However, from a medium-term perspective, this convergence is likely only a minor, temporary phase. A true balancing of the gap may not occur until about two years later, after the current tech investment cycle gradually unwinds, when growth in upstream AI investment peaks, AI transformation across other industries enters a full-scale rollout phase, the broader economy begins restorative growth from AI dividends, new market drivers become conventional, and the economic cycle enters a stable growth phase, gradually weakening the K-shaped cycle characteristics.
Central China Securities states that expectations for A-share market liquidity remain unchanged, with future structures expected to optimize. Regulators continue to guide medium- to long-term funds into the market and deepen reforms of public funds, while also increasing scrutiny on "chasing hot themes," "speculating on concepts," and "excessive speculation." With the interim U.S.-Iran agreement settled, external pressures have eased somewhat. Following policy announcements from the Lujiazui Forum and the conclusion of the Federal Reserve's meeting, external uncertainties have significantly decreased, which should help alleviate market concerns about inflation and rising interest rates, promoting sentiment recovery and valuation rebound in A-share growth sectors. The Shanghai Composite Index is likely to maintain a consolidating pattern, with close attention on macroeconomic data, overseas liquidity changes, and policy developments.
Caixin Securities suggests the probability of a sustained decline at the index level in the short term is low, and investors can still participate in the market's structural trends. Future market movements may rotate based on a narrowing focus within the tech sector and repeated activity in low-position sectors. From a medium-term view, July is a transitional phase where liquidity-driven logic will gradually give way to industrial logic, shifting from liquidity-driven to earnings-driven markets. However, the substantial gains in the tech sector earlier have already priced in high earnings expectations. Whether these expectations can be met as anticipated remains somewhat uncertain. The market is expected to experience significant volatility in July, suggesting a balanced allocation strategy is advisable.
China Galaxy Securities notes that subsequent存量 funds can provide bottom-fishing support for high-quality,景气 stocks, sustaining the structural行情. However, the characteristic of structural crowding also implies faster sector rotation and分化. As July enters the window for半-year earnings预告 disclosures, the market's core logic shifts to earnings verification. The firm recommends focusing on hardcore tech and industry leaders with genuine orders, high盈利 growth, and sustained景气.
Everbright Securities indicates that with the大盘 experiencing a strong recovery, trading remaining active, and policies continuously supporting the market—and with no new major negative external factors emerging—confidence in the market having a "solid floor for the index and numerous structural opportunities" is strengthening. External geopolitical disturbances and expectations for Federal Reserve rate hikes continue to cause interference, coupled with funds heavily concentrated in hard-tech concepts. In the short term, market indices may still experience反复震荡. Furthermore, as July enters the半-year earnings预告 window, the core logic driving market热点 is shifting from valuation expansion to验证 the quality of earnings performance.
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