On June 24th, the three major A-share indices showed a mixed performance in morning trading. At the midday close, the Shanghai Composite Index was down 0.25%, while the Shenzhen Component Index rose by 0.33% and the ChiNext Index gained 0.42%. Over 4400 stocks across the market declined. The combined half-day turnover for the Shanghai, Beijing, and Shenzhen markets was 2.09 trillion yuan, a decrease of 231.8 billion yuan from the previous session.
Key Sectors in Focus
The PCB (Printed Circuit Board) sector saw a collective rebound, with electronic glass fabric, copper-clad laminates, and hydrofluoric acid leading the gains. Mankun Technology surged by the daily 20% limit, China Jushi hit the 10% limit-up, and International Composite Materials rose over 15%, continuing to set new historical highs.
The semiconductor industry chain strengthened significantly, led by the advanced packaging segment. Huicheng Stock, Taiji Industry, and Changdian Technology all hit the 10% limit-up, while Huahong Grace gained over 9%, also reaching a new all-time high.
The innovative drug sector maintained its strength. Haixin Co., Ltd. secured its fourth consecutive limit-up, Hainan Haiyao achieved its second straight limit-up, and WuXi AppTec and Asymchem also hit the daily limit.
On the downside, the so-called "old economy" sectors faced renewed selling pressure. The broader financial sector declined across the board. The real estate industry chain trended lower. Consumer-related concepts such as tourism, duty-free shops, hotels & catering, retail, and baijiu (white spirits) all weakened. Power stocks continued their downward trend. Cyclical sectors like coal, steel, and the oil & gas industry chain remained weak.
Market Outlook and Broker Views
Looking ahead, Everbright Securities believes that confidence in the medium-term market trend remains, as overseas geopolitical and liquidity risks are gradually being priced in. However, the technology sector currently faces high profit-taking pressure due to substantial recent gains. Short-term trading may remain volatile and divergent, awaiting the digestion of profits in tech themes and the prelude to the mid-year earnings season.
Tianfu Securities noted that while the medium-term uptrend for the technology direction remains intact, it faces headwinds from profit-taking and external market volatility. Strategically, with the end of June approaching, liquidity is key. They advise controlling position sizes and paying attention to the sustainability of defensive sectors, which may see rotation internally. Opportunities in the brokerage sector may emerge intermittently. For the tech direction, investors should watch for potential technical breakdowns and consider waiting for adequate pullbacks to accumulate shares in companies with strong mid-year earnings visibility in batches.
Dongwu Securities suggests the current consolidation phase for A-shares continues with significant K-shaped divergence. A breakout from this range would likely require reconfirmation of earnings trends from the upcoming half-year reports and conditions of easing global macro liquidity. They note that changes in industry performance trends and a marginal loosening of global liquidity, both potentially occurring around early Q3, could be key catalysts to end the consolidation phase and drive the market higher.
Analysis of Top Performing Sectors
PCB Sector Rebounds Collectively
The rebound was led by rising prices for upstream raw materials like electronic glass fabric and electronic resin, which have smoothly translated into price hikes for copper-clad laminates. It's noted that major producer Kingboard Laminates announced a 15% price increase for all thicknesses of FR-4 laminates and prepreg on June 16th, while the price of 7628 electronic glass fabric has risen over 70% since the beginning of the year.
Semiconductor Industry Chain Strengthens Significantly
The strength follows reports that Taiwan Semiconductor Manufacturing Company (TSMC) has notified customers of price increases for its wafer foundry services. The hikes, reportedly around 5-10%, are said to cover not only the rumored 3nm process but also all advanced processes at 7nm and below, affecting approximately 75% of its wafer revenue.
Innovative Drug Sector Maintains Strength
The sector's momentum continues following the official launch of the 12th batch of national centralized drug procurement on June 23rd. This round includes 65 drug varieties, covering treatment areas such as dermatology, gastroenterology & metabolism, and cardiovascular diseases.
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