On June 23, 2026, Chinese A-shares declined on lower trading volume, with the ChiNext Index plummeting nearly 4%. The Shanghai Composite Index fell over 1%, barely holding above the 4100-point mark. Specifically, the Shanghai Composite Index closed down 1.37% at 4106.25 points, the Shenzhen Component Index dropped 3.17%, the ChiNext Index fell 3.84%, the STAR 50 Index declined 1.68%, and the CSI A500 Index lost 3%.
Sector-wise, nonferrous metals and computing hardware led the declines, while innovative pharmaceuticals and banking sectors performed relatively better.
Key Market Drivers
The primary factors influencing today's market are as follows. First, sentiment spillover from overseas tech stocks and internal fund flows converged. Overnight, the Nasdaq fell 1.32%, with major tech giants experiencing significant pullbacks, amplifying risk-off sentiment in the A-share market. Direct triggers included SpaceX's bond issuance exceeding $20 billion, which shattered market expectations of its strong cash position, and ongoing talent drain from Google's core AI team, raising concerns about its AI competitiveness. Coupled with Micron Technology's impending earnings report, these events heightened risk aversion in A-shares, leading to substantial declines in the nonferrous metals and technology sectors.
Second, a deeper cause lies in the intensifying expectations for Federal Reserve interest rate hikes. On the news front, the Federal Reserve held its FOMC meeting on June 16-17, 2026, where officials unanimously voted to maintain the federal funds rate target range at 3.5%-3.75%. This June meeting marked the debut of new Fed Chair Warsh. The meeting statement saw significant changes from April's version, becoming more concise, removing forward guidance, and adopting a notably more hawkish tone on inflation. The Summary of Economic Projections lowered growth and unemployment forecasts while raising inflation expectations, with nine voting members indicating support for a rate hike before year-end. Against this backdrop, the A-share technology sector, which had accumulated substantial gains previously, faces dual pressures from sentiment and valuation.
Outperformers in Today's Session
Simultaneously, the innovative pharmaceutical and banking sectors showed relative strength today. The global competitiveness of China's innovative drug industry continues to strengthen, with overseas expansion progressing steadily, underpinned by solid fundamentals. Recently, the National Medical Products Administration released the 2025 Annual Report on the Progress of Clinical Trials for New Drug Registration in China. The report indicates that the total number of clinical trials in China exceeded 5,000 for the first time, reaching a record high.
Furthermore, market style is shifting towards rebalancing, with the large financial sector offering attractive allocation value. The onset of a密集 period for bank dividend payouts has also contributed to the sector's gains. As of June 22, 16 A-share listed banks have implemented their 2025 annual dividend distributions. In an environment of declining risk-free interest rates, dividend yields of 4%-5% or even higher, coupled with banks' relatively stable dividend policies, remain highly attractive to insurance funds, pension funds, and absolute-return oriented capital.
Market Outlook
Looking ahead, the market is currently in a window preceding the US-Iran negotiations and the mid-year earnings reporting season. Risk appetite has retreated somewhat, coinciding with a rising US dollar index. Global risk capital is awaiting validation during the earnings season. However, we believe the medium-term growth trajectory remains intact. First, US-Iran relations have seen a阶段性缓和, with a 14-point memorandum of understanding signed, entering a 60-day technical negotiation phase. However, repeated disruptions by Israel mean that while the Strait is gradually reopening, it is difficult to return to pre-conflict levels. Second, July will usher in a密集 disclosure window for mid-year earnings previews, where growth momentum is expected to be the core pricing factor. Clues for 2026 mid-year earnings growth may primarily concentrate in three areas: the AI hardware industry chain, upstream cyclical commodities, and midstream manufacturing sectors with advantages in overseas expansion. We maintain a positive outlook on AI hardware, new energy, industrial metals, and chemicals.
Risk Disclosure
Short-term index fluctuations and historical performance are for analytical reference only and do not indicate future performance. Views are for reference only, may change due to market factors, and do not constitute investment advice or承诺. Funds carry risks; investment requires caution.
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