The performance of the three major indices was mixed on May 20th, with the STAR 50 Index surging over 3%. At the close, the Shanghai Composite Index fell by 0.18%, while the Shenzhen Component Index ended in positive territory and the ChiNext Index rose by 0.34%.
Sector-wise, the semiconductor industry chain continued its strong momentum. The optical fiber concept remained active, and the liquid cooling server segment gained strength. In the afternoon, the robotics concept saw some localized activity. On the downside, the green power concept collectively adjusted.
Over 3,700 stocks declined across the market. The combined trading volume for the Shanghai and Shenzhen exchanges reached 2.95 trillion yuan, an increase of 67.2 billion yuan from the previous session.
The A-share market experienced a slight increase in volume today, though the turnover did not surpass the 3 trillion yuan mark. The three major indices continued their volatile trend, with only the Shanghai Composite Index ending in the red. However, two key developments were notable among sectors and individual stocks.
First, represented by the STAR 50 Index which has rallied for two consecutive days, chip stocks, or more broadly the semiconductor industry chain (particularly in the domestic substitution segment), demonstrated remarkable resilience.
On the news front, the China Securities Regulatory Commission website showed that Yangtze Memory Technologies Co., Ltd. filed a report for its initial public offering and listing tutoring. Just days earlier, ChangXin Memory Technologies also made significant progress in its listing process. This indicates that as these two core companies accelerate their IPO steps, China's memory chip industry is entering a new phase of development, and the value of related companies in the supply chain is poised for a reassessment.
Institutional analysis suggests that the shortage in the memory industry is expected to persist until 2027. Domestic memory manufacturers are likely to speed up capacity expansion, driving up demand and market space for equipment. Orders and the localization rate for equipment, materials, and components in the supply chain are expected to rise continuously, and the advanced packaging industry chain is set to benefit.
Second, several stocks that had experienced consecutive daily limit-downs saw their declines halted today.
For instance, *ST Yuandao, after six consecutive 20% limit-downs, opened above its limit-down price during the call auction today, rallying from an opening drop of 13% to hit the 20% daily limit-up.
ST Geo-Jade Petroleum Corporation, which had recorded its 13th consecutive limit-down in the morning, also saw its decline halted at 9:44 AM, quickly surging to its daily limit-up price.
At 10:27 AM, Julig Suoju also attracted significant capital inflow, halting its third consecutive limit-down and rising to its daily opening price at its peak. Although it closed down 9.72%, it narrowly avoided what is colloquially termed a "three-board halt."
Some market views suggest that multiple stocks halting their consecutive limit-downs on the same day could be seen as a strengthening of short-term speculative sentiment, though its sustainability remains to be observed. If these stocks continue to perform well in subsequent sessions, it may introduce some changes to the short-term trading environment.
By the market close, several ST stocks still recorded over ten consecutive limit-downs, while some sports-related concept stocks continued their downward adjustments.
Additionally, attention is drawn to NVIDIA, the dominant player in AI chips, which is scheduled to release its Q1 FY2027 earnings report after the U.S. market closes on Wednesday, corresponding to early Thursday morning Beijing time.
Reports indicate that options positioning data shows traders expect NVIDIA's stock price to potentially experience a fluctuation of approximately 6.5% following its latest earnings announcement, equating to a market capitalization swing of about $355 billion.
What impact might this have on A-shares? Simply put, the first consideration is whether the earnings report exceeds expectations, followed by preparing corresponding strategies for different scenarios. For reference, historical data from recent years has been compiled and is presented in the chart below.
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