The three major A-share indices opened higher collectively on June 22nd. After an initial morning surge and subsequent retreat, the market regained upward momentum before noon, driven by brokerage stocks. The afternoon session saw a powerful and sustained rally, with significant gains across the board.
Market analysis shows a strong afternoon performance from the financial sector, with brokerages and insurance leading the charge. The non-ferrous metals and chemicals sectors saw a wave of limit-up gains, while the semiconductor industry chain continued its strength. Fintech and lab-grown diamond concept stocks were also active. Conversely, robotics, commercial aerospace, and innovative drug themes weakened. At the close, the Shanghai Composite Index rose 1.78% to 4163.1 points, the Shenzhen Component Index gained 2.13% to 16372.5 points, and the ChiNext Index advanced 2.52% to 4359.39 points.
According to Wind data, 2,916 stocks across the Shanghai, Shenzhen, and Beijing exchanges rose, while 2,464 fell, with 144 remaining flat. The total turnover for the Shanghai and Shenzhen markets reached 3.7372 trillion yuan, an increase of 427.1 billion yuan from the previous session's 3.3101 trillion yuan. Specifically, Shanghai's turnover was 1.704 trillion yuan, up 143.5 billion yuan, and Shenzhen's turnover reached 2.0332 trillion yuan.
Data shows 235 stocks across the markets rose by 9% or more, while 24 fell by 9% or more.
Key Sector Performance
Brokerage stocks surged significantly before noon, with insurance shares also performing strongly, driving the non-bank financial sector sharply higher. Stocks like East Money Information Co., Ltd. (SZSE: 300059), Yuexiu Capital Holdings Limited (SZSE: 000987), New China Life Insurance Co., Ltd. (SHSE: 601336), China Securities Co., Ltd. (SHSE: 601066), GF Securities Co., Ltd. (SZSE: 000776), and Changjiang Securities Company Limited (SZSE: 000783) hit their daily limit-up or rose over 10%.
The non-ferrous metals sector opened high and climbed further, with nearly 20 stocks, including Jiaozuo Wanfang Aluminum Manufacturing Co., Ltd. (SZSE: 000612), Zhuye Co., Ltd. (SZSE: 000751), Yuguang Gold and Lead Co., Ltd. (SHSE: 600531), Chihong Zinc and Germanium Co., Ltd. (SHSE: 600497), Luoping Zinc and Electricity Co., Ltd. (SZSE: 002114), Jinduicheng Molybdenum Co., Ltd. (SHSE: 601958), and Xiamen Tungsten Co., Ltd. (SHSE: 600549), reaching their daily limit-up.
The basic chemicals sector also posted notable gains, with over 30 stocks like Power Diamond Co., Ltd. (SZSE: 301071), Ruifeng High-Tech Materials Co., Ltd. (SZSE: 300243), Shiming Chemical Technology Co., Ltd. (SZSE: 300522), Kenter Special Materials Co., Ltd. (SZSE: 301591), Cathay Biotech Inc. (SHSE: 688065), Sunresin New Materials Co., Ltd. (SZSE: 300487), and Sichuan Jinluo Co., Ltd. (SZSE: 300505) hitting limit-up or rising over 10%.
In contrast, the automotive sector underperformed. Stocks such as Chengdu Xiling Power Science & Technology Inc. (SZSE: 300733), Ningbo Fangzheng Auto Mold Co., Ltd. (SZSE: 300998), and Daimei Co., Ltd. (SHSE: 603730) fell by their daily limit-down or dropped over 10%. Others like Zhongding Sealing Parts Co., Ltd. (SZSE: 000887), Jiangsu Tianyouwei Automotive Parts Co., Ltd. (SHSE: 603202), Xiangyang Automobile Bearing Co., Ltd. (SZSE: 000678), and Tieliu Co., Ltd. (SHSE: 603926) declined by more than 7%.
The machinery and equipment sector saw significant declines, with stocks including Siglent Technologies Co., Ltd. (SHSE: 688112), Beijing Sailing Intelligent Technology Co., Ltd. (SHSE: 688115), Farsoon Technologies Co., Ltd. (SHSE: 688433), Bohao Accumulation Co., Ltd. (SHSE: 688097), and Qiaofeng Intelligence Equipment Co., Ltd. (SZSE: 301603) dropping over 10%.
The beauty and personal care sector was sluggish, with Proya Cosmetics Co., Ltd. (SHSE: 603605) falling over 6%. Stocks like Jiah Home Collection Co., Ltd. (SZSE: 300955), Wanmei Biological Products Group Co., Ltd. (SHSE: 603983), Baiya Sanitary Products Co., Ltd. (SZSE: 003006), and Dencare Oral Care Co., Ltd. (SZSE: 001328) declined more than 3%.
Brokerage Views on Market Outlook
One securities firm suggests the market is likely to experience volatile consolidation in the near term. It attributes the recent market adjustment primarily to marginally tighter global liquidity and crowded trading in the AI hardware sector, which pressured valuations. Last week, progress in US-Iran talks and the conclusion of the Federal Reserve's meeting led to a marginal improvement in global liquidity, fueling a valuation rebound across global markets, with AI and tech stocks leading the recovery. However, the positive expectations from the US-Iran talks are now largely priced in, and the short-term valuation repair for tech stocks may have run its course. Consequently, market volatility is expected to increase, leading to a consolidation phase.
Looking ahead, expectations of further Fed rate hikes may constrain tech valuations, making a significant re-rating less probable. Further index gains will likely depend on earnings-driven performance from tech stocks. The high-growth trend in the AI industry persists, and with overseas tech giants' interim reports due from mid-July to late August, the pricing logic for the AI/tech sector is expected to shift back to fundamentals and earnings. If these reports exceed expectations, the AI/tech sector is likely to regain strength.
Regarding market style, last week saw intensified differentiation, with funds continuing to cluster in large-cap tech growth stocks, leading to significant gains for the STAR and ChiNext indices. In contrast, dividend and small/micro-cap stocks mostly declined, indicating an extreme structural divergence that adds market instability. A subsequent rebalancing of market styles is anticipated. Overall, while the tech sector has stabilized and rebounded, a further valuation expansion is unlikely. Macroeconomic headwinds persist, and the timing for a sustained uptrend remains uncertain. The near-term outlook points to volatile consolidation, suggesting a focus on structural opportunities.
Another brokerage maintains a view of market consolidation. It notes a significant improvement in market sentiment and a return to an upward trend in price and volume, but fundamentals remain weak and valuations are neutral. On style, it suggests a return to a balanced allocation between growth and value, as the short-term price/volume momentum for growth has turned positive again. This shift is attributed to three potential factors: 1) Market pricing has largely absorbed the expected US-Iran agreement and is becoming desensitized to geopolitical noise; 2) Hawkish comments from a Fed official led to a renewed rise in the US dollar and Treasury yields. As the current AI-centric tech industry is less sensitive to interest rates, traditional sectors are being suppressed again by rate hike expectations; 3) Despite the holiday boost, May consumption data showed weakness, and the divergence between old and new economic drivers hasn't narrowed significantly. The logic of funds rotating from high to low valuations isn't solid, hence a balanced allocation is recommended to navigate rapid rotations in a consolidating market.
A third firm views the strong positive candlestick as establishing a new upward trend for A-shares. Externally, the easing of US-Iran tensions and the conclusion of major central bank meetings have marginally improved factors that previously suppressed risk appetite. Subsequent "hike trading" may cool as oil prices retreat. Internally, resonating with the global AI/tech rally, the STAR and ChiNext indices hit record highs on strong volume, formally marking the start of a new uptrend.
A fourth securities company believes the tech rally may continue, while a value stock reversal lacks conditions, and a near-term shift in policy focus is unlikely. Looking forward, the imminent IPO of a major tech company could serve as a new catalyst. From a regulatory perspective, ensuring a smooth listing is a primary concern, likely leading to a controlled, relatively low issuance valuation. A strong post-listing performance could directly trigger two clear pathways: a valuation re-rating for domestic semiconductor equipment stocks and a broader uplift for the STAR 50 Index. Beyond the chip theme, other areas warrant attention. The power equipment and new energy sector is supported by solid interim earnings expectations. Non-ferrous metals benefit from a weakening US dollar trend, but the strongest momentum is concentrated in minor metals linked to the AI supply chain, rather than traditional cyclical metals.
Another major brokerage indicates that while the market has experienced a strong short-term rebound, A-shares may enter a period of consolidation once this rebound concludes. It remains optimistic about the long-term performance of AI computing power as a core theme in this bull market. Domestic policy tailwinds, such as those from financial forums, are expected to continue supporting the STAR and ChiNext boards, which are likely to maintain their strength. However, elevated valuations and trading structures could become primary reasons for a potential阶段性 shift within the tech主线. For industry allocation, the short-term focus should remain on the AI computing power industry chain, with an emphasis on identifying high-growth segments within it.
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