China's three major stock indices opened higher collectively on May 11, with the Shanghai Composite Index opening directly above the 4200-point mark. The markets opened strong and continued to rise with increased volume in the morning session. Trading remained at elevated levels in the afternoon, with gains further expanding by the close.
Sector-wise, the semiconductor and computing hardware supply chains saw another surge, led by memory chips, GPUs, and CPOs. Stocks related to rare earths, innovative drugs, photovoltaics, and commercial aerospace were also active. In contrast, shipping, gold, and lithium mining themes weakened. The total market turnover exceeded 3.5 trillion yuan, reaching its highest level in four months.
At the close, the Shanghai Composite Index was up 1.08% at 4225.02 points. The Shenzhen Component Index rose 2.16% to 15899.3 points, and the ChiNext Index gained 3.5% to 3928.97 points.
Wind data shows that 3113 stocks across the two main boards and the Beijing Stock Exchange advanced, while 2239 declined and 155 ended flat.
The combined turnover for the two markets was 3538.9 billion yuan, an increase of 490.3 billion yuan from the previous session's 3048.6 billion yuan, approaching the all-time single-day high of 3.94 trillion yuan for A-shares. Specifically, turnover on the Shanghai market reached 1584.4 billion yuan, up 252.7 billion from the previous session's 1331.7 billion, while Shenzhen market turnover was 1954.5 billion yuan.
According to DZH VIP data, 180 stocks across the two markets and the Beijing Stock Exchange rose by 9% or more, while 9 stocks fell by 9% or more.
**Semiconductors Surge, Shipping Stocks Lead Declines**
By sector, semiconductors posted significant gains, with nearly 30 stocks, including Xingfu Electronics (688545), Puran Shares (688766), Changchuan Technology (300604), Montage Technology (688008), Giantec Semiconductor (688123), Tianyue Advanced (688234), and Hensun Technology (688416), hitting the daily limit-up or rising over 10%.
Machinery and equipment stocks also performed strongly. Nearly 20 stocks, including Shenkeda (688328), Jingzhida (688627), Huashu High-Tech (688433), Landon Optoelectronics (300862), Wuyang Automation (300420), XCMG Construction Machinery (000425), and Seagull Shares (603269), rose by the limit or over 10%.
The real estate sector stood out. Stocks such as Shanghai Industrial Development (600748), Shenzhen Special Economic Zone Real Estate & Properties (000029), Jingtou Development (600683), and Chunlan Shares (600854) hit the limit-up, while Gemdale Group (600383), 5I5J Holding Group (000560), and Hefei Urban Construction (002208) gained over 5%.
Shipping stocks led the declines, dragging down the transportation sector. China Merchants Energy Shipping (601872), Beibu Gulf Port (000582), and China Merchants Nanjing Tanker (601975) fell over 5%. COSCO Shipping Energy Transportation (600026), Jiacheng International (603535), and China Express Airlines (002928) dropped over 3%.
Media stocks were also among the laggards. Huace Film & TV (300133), Guizhou Broadcasting & TV Information Network (600996), Shiji Huatong (002602), Perfect World (002624), Dianhun Network (603258), and H&R Century (000892) all declined over 3%.
Non-ferrous metals underperformed. Lidao New Material (603937) fell over 7%, Chifeng Jilong Gold Mining (600988) dropped over 5%, while Zhongjin Gold (600489), Shanjin International (000975), Guocheng Mining (000688), and Shandong Gold Mining (600547) retreated over 3%.
**A-Shares Entering the Second Half of the Bull Market**
Huatai Securities released an A-share strategy report stating that while a meeting between the Chinese and US heads of state in Beijing may take place and market activity is currently high, signals from event-driven factors, overseas catalysts, and earnings verification all point to a narrowing short-term upside. First, historical analysis shows that A-shares have not performed strongly after such meetings, with a slightly defensive bias favoring midstream materials. Second, for the tech sector, with earnings reports from US AI giants concentrated this week, attention is needed on the performance of US derivatives and earnings reports from major domestic companies. Third, pricing for sectors with high first-quarter earnings growth is already relatively full. Therefore, Huatai Securities suggests adopting a trading-range mindset to navigate the dense event window, moderately reducing positions, and rotating within the structure. First, maintain an overweight allocation on the AI chain but rebalance internally, shifting moderately from semiconductors to lithium batteries and energy storage. Second, increase allocation to copper, aluminum, and chemical products like urea and sulfur, which show both magnitude and breadth in upward earnings revisions and offer reasonable valuations.
CITIC Securities believes that looking ahead to the second half of 2026, the bull market in A-shares will continue. In terms of market rhythm and characteristics, significant valuation expansion may be difficult, and the rise of the overall A-share index may slow, showing signs of structural differentiation. It is expected that A-shares will exhibit a structural slow-bull market, driven by structural prosperity and concentrated fund flows. Currently, the AI computing power theme is far from a full-blown bubble stage. The market will not simply exit the tech sector due to overheated valuations but will see prosperity spread along the industrial chain based on three logics: supply shortages leading to price increases, new demand discovery, and production capacity displacement, against the backdrop of a sustained industry trend.
Central China Securities opines that after a temporary easing of US-Iran tensions, market sensitivity to geopolitical risks has significantly decreased. Defensive sectors like high-dividend stocks, previously favored by safe-haven funds, have weakened, while technology and growth directions have become the main drivers of the market. It is expected that the Shanghai Composite Index will likely maintain a pattern of volatile upward movement. Close attention is advised on macroeconomic data, changes in overseas liquidity, and policy dynamics.
China Galaxy Securities notes that in the short term, US-Iran conflicts may still cause repeated disturbances, but market sensitivity to such external events has weakened, with marginal impact converging. Subsequent events like a potential Trump visit to China and the change of the Federal Reserve Chair will become external focal points for the market. Domestically, structural highlights stand out in the ongoing economic recovery, providing earnings support for upward market movement. The market may face a pattern of consolidation and increased differentiation in the short term. However, the overall upward trend remains unchanged, and the market is expected to maintain characteristics of internal sector rotation and structural opportunities. The firm continues to emphasize focusing on thematic opportunities and seizing directions for structural positioning.
CITIC Securities stated that the momentum in tech stocks across China, the US, Japan, and South Korea has been strengthening recently. However, even the strongest industry trends can be followed by sharp volatility if short-term price slopes become too steep. The latest MSI (Momentum Strength Indicator) reading for the ChiNext Index is 64.4, still within a historically reasonable range overall. Notably, before the pullback on May 8, the reading on May 7 was 71.9, very close to the critical value of 75 for the strong acceleration zone. Even with a strong AI-related industry trend, abnormally high momentum intensity and a steep short-term rise in slope likely imply increased subsequent volatility. In this context, for existing funds, actively reducing portfolio volatility may be a better choice.
China Merchants Securities indicated that recent industrial prosperity in overseas computing power, domestic computing power, and lithium batteries is relatively high. In terms of investment, domestic computing power offers the strongest short-term elasticity, overseas computing infrastructure has stronger medium-term certainty, and lithium batteries are in a stage of earnings recovery. Simultaneously, first-quarter report disclosures have further verified that overall A-share earnings are entering an upward trend, with initial signs of supply-side expansion. A-shares are transitioning from a liquidity-driven, thematic investment phase to an earnings verification stage. Areas showing high year-on-year earnings growth in annual and first-quarter reports are mainly concentrated in: high-growth sectors driven by AI demand, some export-advantaged manufacturing areas, and resource products experiencing price increases.
Comments