The three major A-share indices opened with mixed results, with the Shanghai Composite Index down 0.17% and the ChiNext Index up 0.82%.
In terms of sector performance, optical fiber, communication equipment, and CPO (Co-Packaged Optics) sectors were among the most active gainers, while precious metals, coal, and power sectors led the declines.
Analyst Outlook on Market Direction
One securities firm suggests that the technology sector is leading the market's strength, with indices still showing a pattern of volatile upward movement. The Shanghai Composite Index is expected to recover lost ground.
The firm indicates that in the coming trading sessions, as the market styles of chasing growth and rotating from high to low valuations gradually clarify their dominance, the overall tone for the A-share market in June is likely to be confirmed, still revolving primarily around technology sectors, which aligns with their consistent view.
In the short term, overseas geopolitical conflicts have caused some temporary disturbances, but high-growth industries, particularly the technology sector, continue to lead the market higher. The indices maintain their pattern of fluctuating gains, and the Shanghai Composite Index is poised to reclaim previous losses.
Market Still Has Room for Upside
Another securities firm believes the market still possesses upward potential, with high-growth directions remaining the core focus for allocation, and sectors like the export chain warranting close attention.
The firm's analysis suggests that the market style and recommended sectors for June may lean towards a scenario of "weak fundamentals, strong sentiment," corresponding to a growth-oriented market style.
Regarding sector allocation, under a growth style, attention should be paid to national defense and military industry, computer, communications, electronics, non-ferrous metals, and power equipment sectors.
Market in a Phase of Weak Recovery
A further securities firm posits that the major market indices are currently in a phase of weak recovery, and in terms of allocation, focus should be on new quality productive forces and pro-cyclical directions.
The firm notes that while volatility in the AI sector has significantly increased, the medium- to long-term industry growth logic remains intact. This week, the major indices are highly likely to continue their weak recovery trend.
The scale of market share lock-up expiries is rising in June, coupled with the potential capital siphoning effect from large IPOs, which may further intensify short-term market fluctuations.
The probability of a comprehensive shift in market style within the year remains low, and structural market trends are expected to persist. It is recommended to position in core targets with strong certainty in earnings realization and clear high-growth expectations.
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