On May 8, the market experienced a volatile adjustment, with the ChiNext Index and the Shenzhen Component Index both falling over 1% during the session, while the STAR 50 Index dropped more than 2%. By the close, the Shanghai Composite Index ended in negative territory, the Shenzhen Component Index declined by 0.5%, and the ChiNext Index fell by 0.96%.
Sector-wise, the commercial aerospace concept surged, humanoid robotics stocks collectively strengthened, PCB concepts repeatedly gained momentum, and optical fiber concepts continued their upward trend. On the downside, the battery industry chain underwent a volatile adjustment.
More than 3,600 stocks across the market advanced, marking the third consecutive day with over 100 stocks hitting the daily limit-up. The total trading volume on the Shanghai and Shenzhen exchanges reached 3.05 trillion yuan, exceeding 3 trillion yuan for three straight sessions, though it contracted by 95.4 billion yuan compared to the previous trading day.
By the close, A-shares achieved a "positive start" in the first week of May.
However, after two consecutive days of gains, some new developments emerged in the market today.
First, the indices showed slight fatigue.
Although they repeatedly attempted to turn positive during the session, all three major indices ended with minor losses.
Notably, as the Shanghai Composite Index edged closer to the 4,200-point mark, the pace of its ascent slowed somewhat, indicating that some funds remain cautious about resistance levels.
Wind data revealed that after consecutive gains on May 6 and 7, mainstream broad-based ETFs (primarily tracking the CSI 300 Index) experienced significant net outflows.
Second, individual stocks continued to advance, suggesting market sentiment remains robust.
Over 3,600 stocks closed higher, but leadership shifted from large and mid-caps in the previous two days to small and micro-caps, resulting in the yellow lines of the three major indices outperforming the white lines.
Wind data showed that the Beijing Stock Exchange 50, micro-cap stocks, CSI 2000, and CSI 1000 indices posted decreasing gains in that order during the day, while other major broad-based indices generally ended in negative territory.
The rotation between large and small caps also triggered sector rotations, which will be detailed later.
Overall, under these market conditions, the average price of all A-shares opened low but rose during the day, recording five consecutive positive sessions. The closing price of 32.12 yuan reached its highest level since mid-to-late June 2015, marking an 11-year peak.
It is worth noting that during the rebound of this indicator and the broader market since early April, the total trading volume of all A-shares has increased moderately. Since May, it has hovered around 3 trillion yuan, still below the peak of 3.98 trillion yuan reached on January 14 before the subsequent decline.
Optimists argue that a scenario of increased volume without reaching extreme levels is more conducive to further market gains.
Regarding allocation directions for May, China Galaxy Securities stated in a research report:
First, sectors such as technology, AI, and optical communication are currently in a state of "high growth, high valuation, and high crowding." This demands stronger trading skills, and May should focus on sub-sectors with consistently outperforming earnings rather than broad rallies.
Second, the medium-term trend for advanced manufacturing remains intact. The commercial aerospace logic in defense and the robotics industrialization logic in machinery equipment are expected to persist, along with overseas expansion in new energy and power equipment.
Lastly, the resources sector benefits from the year-on-year turnaround in the Producer Price Index and rising price levels. Emphasizing the revaluation of strategic resources and geopolitical security premiums, sectors like non-ferrous metals, basic chemicals, petroleum and petrochemicals, building materials, and steel also exhibit elasticity.
Thus, the institution recommends focusing on three themes:
(1) Technological innovation, self-sufficiency, and certain industrial trends, with emphasis on sub-sectors showing high earnings growth. Suggested areas include communication equipment, computing power, storage, semiconductors, and computer hardware.
(2) The logic of rising prices for resources and materials. Companies benefiting from supply contraction, marginal demand recovery, or higher price levels, with a focus on non-ferrous metals, basic chemicals, and utilities.
(3) Themes related to energy and alternative demand amid recurring geopolitical tensions, along with defensive sectors. Key directions: coal, coal chemical, and new energy.
Dongwu Securities, meanwhile, suggested that May allocations should concentrate on new energy and technology, as both sectors have earnings support and industrial logic, while other sectors may lack sufficient catalysts for gains.
Additionally, it is important to note that after collective surges in core tech stocks in April, valuations require time to digest. High-flying sectors face potential phased adjustments and structural repairs, with May offering rotation opportunities as funds shift from high to low valuations.
Finally, let's examine today's leading sectors in rotation.
(1) Humanoid Robotics
On the news front, Tesla officially announced on May 1 the start of mass production for its Optimus Gen-3 humanoid robot, with the first batch rolling off the assembly line at its Fremont, California factory. Priced at $49,000 per unit, the cost has dropped 73% compared to the prototype.
Furthermore, according to customs statistics, China's robotics industry accelerated its overseas market expansion in the first quarter. Total exports of various separately listed "robots" reached 11.32 billion yuan, with products sold to 148 countries and regions worldwide. Industrial robot exports amounted to 3.16 billion yuan, a 42% year-on-year increase.
Huaxin Securities believes the robotics sector is currently at a low overall level, with Tesla chain catalysts gradually advancing. The Optimus v3 is expected to be released mid-year, supporting sustained sector performance. It recommends prioritizing investments in Tesla chain targets before the V3 release.
(2) AI Application End
Overnight, U.S. AI application software stocks strengthened, as some software companies reported earnings exceeding market expectations. Goldman Sachs pointed out that enterprise-level agents are projected to drive a 24-fold increase in global token consumption by 2030 compared to 2026, while consumer-level agents will contribute a 12-fold growth. Unlike "on-demand chat," the always-on agent model is expected to result in 23 billion daily queries by 2030, with about 30% focused on productivity scenarios.
On another note, the gaming sector also showed linkage with AI applications. It is reported that Perfect World Esports will host the world-class event "CAC 2026" in Shanghai from May 20 to 24, 2026, with a total prize pool of $1 million. The tournament will feature 16 teams, with 12 directly invited based on the February 2026 world VRS rankings, two as wild cards, and the remaining two spots determined through Asian closed qualifiers.
(3) Commercial Aerospace and Defense
In the short term, May enters a密集 window for space launches, with missions like Tianzhou-10 and Shenzhou-23 scheduled. The Long March 10B and Zhuque-3 Yao-2 reusable rocket tests are imminent. SpaceX is expected to go public in June-July with a target valuation of $1.75 trillion, potentially boosting valuations globally in the commercial aerospace sector.
Medium-term, the entire industry chain, including payloads, satellite manufacturing, and ground terminals, benefits from accelerated constellation deployment. Long-term, the emerging space computing track is rapidly taking shape, integrating satellites with AI, and enabling in-orbit networking of computational constellations.
Institutions note that both state-owned and private rocket companies in China are making efforts, with the second quarter likely to kick off a wave of first flights for reusable rockets. Domestic satellite batch tenders are imminent, multiple rocket models at home and abroad are set for debut flights, and functionalities like direct-to-device connectivity will drive further iterations in satellite performance, leading to a phase of volume and price increases for satellites.
(4) Communication Equipment (Optical Modules)
Western Securities highlighted that the high growth in AI computing power will continue to drive structural opportunities in the communication industry through 2026. The evolution of AI large models and application penetration are fueling rapid growth in computing investments, with supply shortages across multiple segments of the产业链. Demand is shifting towards the inference end, while entry by second-tier cloud providers and the rise of domestic computing power present new highlights. Additionally, low-earth orbit satellite internet is entering a growth cycle, synergizing with AI computing to expand the industry's growth space.
(5) Real Estate
According to CCTV Finance, Beijing's secondary housing market maintained its recent momentum. Driven by policy benefits, demand release, and seasonal effects, April's transaction volume for existing homes reached 18,000 units, the highest for the same period in nearly five years.
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