The Chinese stock market experienced a day of volatile adjustments on June 10th, with the Shenzhen Component Index and the ChiNext Index both falling over 2%, while the Shanghai Composite Index dropped below the 4000-point mark.
More than 3,800 stocks declined across the market. The total trading volume for Shanghai and Shenzhen markets was 2.62 trillion yuan, a decrease of 21.1 billion yuan from the previous trading session.
By sector, semiconductor material stocks showed strength across the board, AI application concepts bucked the downward trend, and the major consumer sector saw pockets of activity, with photovoltaic concepts showing a notable move in the afternoon. On the downside, liquid cooling server and data center power supply sectors underwent significant adjustments.
Influenced by another sharp decline in overseas tech stocks, the weakness in A-share technology sectors today put renewed pressure on the broader market. The day's trading pattern even bore a striking resemblance to that of Monday. As shown in the chart, the Wind All Share A Index fell 2.76% on Monday, rose 2.23% on Tuesday, and declined 1.27% today.
Examining the intraday price movements of the "All A Median" index on Monday and Wednesday reveals a similar pattern: opening lower in the morning, showing brief resistance before weakening persistently, reaching an emotional low point in the afternoon, followed by a minor rebound.
Thus, over the first three trading days of this week, the A-share market has formed a pattern of "sharp fall → sharp rise → sharp fall."
Given the similar price action, it is worth observing whether the market will exhibit a "rebound inertia" tomorrow.
However, it is an undeniable fact that the intense volatility has sharply increased the difficulty for investors to make profits. Under such circumstances, choosing to reduce positions or wait on the sidelines is actually a prudent move. Recent A-share market behavior, often showing higher volume on down days and lower volume on rebound days, proves that a significant amount of capital has already made this choice.
As long as this capital is not "permanently leaving the stock market," funds withdrawn for short-term safety could potentially return as new incremental capital once the situation becomes clearer.
Therefore, the primary questions to consider at present are:
1. Why is the market falling?
2. How might the market find a bottom?
Regarding the first question, based on public reports, the news most impacting today's market was, firstly, the re-ignition of conflict in the Middle East, which renewed global stock market tensions. By the market close, South Korea's KOSPI index fell 4.52%, and Japan's Nikkei 225 index dropped 1.89%.
It was reported that on June 10th, Iran's Revolutionary Guard Corps claimed to have carried out a missile strike on a US military base in Jordan, destroying an F-35 fighter jet hangar. Simultaneously, air raid sirens sounded across Bahrain, and Kuwait also reported intercepting "hostile" aerial targets. This followed a statement from the US Central Command regarding a completed "defensive strike" against Iran.
Secondly, a bearish research report targeting the "optical" sector was influential. The overnight plunge in the US stock market's optical communications sector was also related to this.
Yesterday, Semi Analysis released a research report targeting CPO (Co-Packaged Optics) and 800V DC. The report stated that while the single-ended 800-volt DC solution promoted by Nvidia is expected to see widespread industry application, the timeline for scaled shipments has been postponed to 2028 and beyond.
The report indicated that market expectations for CPO implementation by 2027 are overly optimistic, and the related process will be significantly delayed. The institution lowered its shipment forecasts for scaled-deployment CPO for 2026-2027. The market expectation for mass production of capacity-upgrade CPO was originally 2027-2028, but this assessment now suggests true volume ramp-up may not occur until 2029. Concurrently, Non-Co-Packaged Optics (NPO) projects are expected to ramp up volume, which could benefit optical module transceiver manufacturers.
A previous sharp drop in memory chip concepts on June 5th also stemmed from a report by the same institution claiming "Nvidia's Vera Rubin memory usage halved."
However, this morning, the market also circulated a report featuring an interview with an Nvidia networking division executive, who seemed to refute Semi Analysis's claims and expressed a nearly opposite view on the CPO issue.
As for the second question, if we extend the timeframe slightly, market risk appetite is likely to remain relatively low until around June 17th, making significant moves difficult.
For instance, Zhang Yidong, Chief at Haitong International, suggested that the market in June and July should focus on three key potential turning points:
First, the US CPI data to be released at 8:30 PM Beijing time on June 10th, which will determine the pace of interest rate hikes. If the May CPI is ≥3.9%, the upward potential for the 10-year US Treasury yield could far exceed expectations, leading to a significant valuation adjustment in the global tech bull market.
Second, the FIFA World Cup in the US, Canada, and Mexico from June 11th to July 19th.
Third, the Federal Reserve's interest rate meeting from June 16th to 17th, including the rate decision and dot plot. A speech by Kevin Warsh is scheduled for June 18th Beijing time. The focus will be on the pace and intensity of upward disturbances in the global asset pricing anchor—the 10-year US Treasury yield—which will determine the severity of the "summer chill." If the 10-year US Treasury yield breaks above 4.5%, a phased adjustment in tech stocks may occur. If it reaches 4.7%~5%, this could signal the market adjustment entering a short-term panic phase.
Kaiyuan Securities research believes the impact of this (geopolitical conflict) may be significantly weaker than the US-Israel-Iran shock in March. However, it is necessary to increase the weighting of macro events in equity pricing. In the short term, attention can be paid to geopolitical risks, Federal Reserve rate hike expectations, and the Bank of Japan's interest rate decision.
Since late March, domestic and international equity markets have been relatively desensitized to pricing in geopolitical risks and the impact of high oil prices on Fed rate hike expectations. This asset price volatility may trigger reflection; when risk pricing is insufficient, the flip side of high valuations and overly strong consensus expectations can be fragility.
Finally, let's briefly examine the logic behind today's sectors that led gains against the trend.
First, sectors like semiconductor materials and semiconductor wafers, which are偏向"price increase" themes.
On the news front, customs export data shows that in April this year, the average export price of domestic tungsten hexafluoride reached $149.79 per kilogram, a 117.9% increase from the January export price, with both sequential and year-on-year growth in export volume for April.
Additionally, a CITIC Securities research report stated that SUMCO expects AI demand for advanced process 12-inch silicon wafers to reach 1 million wafers per month by 2026, accounting for over 10% of global 12-inch wafer demand. AI-related logic chips and memory chips have become core growth drivers for 12-inch silicon wafers, while power and analog chips are accelerating their shift to 12-inch manufacturing platforms, increasing demand elasticity.
Second, "safe-haven" and "market-stabilizing" sectors like banks, insurance, and securities.
It is reported that listed banks are conducting intensive cash dividend distributions this week. Today, China CITIC Bank implemented its 2025 dividend distribution plan, paying 1.93 yuan per 10 shares (pre-tax). China CITIC Bank's stock price rose over 3% at one point, filling the gap left by the ex-dividend adjustment. Guiyang Bank also went ex-dividend today with a distribution of 3 yuan per 10 shares (pre-tax), with its stock price also showing a slight fill of the ex-dividend gap.
Guosheng Securities pointed out that the current investment focus in the banking sector centers on the valuation recovery主线 driven by the restorative growth of core revenue. The banking sector possesses strong certainty for profit recovery and high dividend attributes, further highlighting its defensive and offensive配置性价比.
Third, as the 2026 FIFA World Cup approaches, gradually活跃的 sports concept stocks have also driven strength in the tourism sector.
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