This week, the three major indices showed mixed performance: the Shanghai Composite Index rose by 0.41%, the Shenzhen Component Index fell by 1.17%, and the ChiNext Index declined by 4.16%. What lies ahead for the market? Here's what various institutions have to say.
China Galaxy Securities suggests focusing on structural breakthroughs in technology and manufacturing, with the main theme shifting to semiconductors, AI, and aerospace. The internal leadership within technology manufacturing has clearly transitioned from the "AI + new energy" focus in May to the three directions of "semiconductors + AI + aerospace" in June. Theme rotation has slowed compared to May, making the market's main themes more concentrated. Synthesizing signals from the macro environment, market style, and sector levels, the current market presents a pattern of "macro pressure coexisting with clear structural themes." While the overall environment constrains risk appetite, capital has formed a strong consensus on manufacturing upgrades, energy security, and AI industry trends, continuously flowing into sectors like technology innovation, semiconductors, aerospace, and manufacturing. These areas have become the directions with the strongest relative return potential in the market. The growth style continues to dominate at the style level, corroborating the structural strength of the technology and manufacturing theme, together forming the core allocation logic for the current stage.
CITIC Securities believes that a revision of the interest rate hike narrative, combined with marginal changes in market liquidity, could catalyze a recovery in some non-AI sectors with earnings support. The K-shaped divergence has been reinforced by narratives, and recent fluctuations and convergence due to narrative shifts are normal. This week saw intensive marginal changes in two sets of narratives: one related to assumptions about the global monetary environment, where the market began to more comprehensively scrutinize the Federal Reserve's policy stance rather than presuming a hawkish rate hike path, leading to a shift in the tightening and strong dollar narrative and a repair of negative sentiment towards non-AI sectors; the other related to the AI industry trend, where news about Meta sparked significant controversy, reflecting the market's current low tolerance for any negative information on the AI industry and indicating that downstream sectors need richer commercial monetization models to support more aggressive upstream investment expectations. Additionally, it is expected that the outflow pressure from broad-based ETFs in the A-share market will significantly ease, representing the most important marginal change in market liquidity. The revision of the rate hike narrative, combined with these liquidity changes, is expected to catalyze a recovery in some non-AI sectors with solid earnings foundations.
CMS Securities asks which sectors are likely to see high growth or improvement in their interim reports. Looking ahead to July, at the macro level, the economy shows characteristics of "marginal weakening in aggregate terms, widening internal-external temperature differentials, and continued divergence between old and new growth drivers," with oil price levels retreating from highs and a Fed rate hike likely not materializing. At the meso level, sector allocation clues are recommended to focus on areas with sustained high growth or improvement in interim report performance. Considering multiple dimensions such as meso-level景气, profitability,筹码分布, valuation, trading, cycle stage, and track value, this period recommends attention to electronics (semiconductors, components), power equipment (batteries, grid equipment), machinery (automation equipment, general equipment), non-ferrous metals (metal new materials, industrial metals, minor metals), basic chemicals (non-metallic materials, chemical products), and non-bank finance (securities).
Industrial Securities Strategy questions whether a slowdown in capital expenditure (Capex) necessarily leads to the end of a market rally. As July enters the earnings season for both China and the US, the relative strength of景气 and changes in earnings performance remain core clues for allocation. For sectors with strong market consensus on景气, such as AI computing power and upstream resource products (especially non-ferrous metals, chemicals, fiberglass, and other AI-related materials), which were significantly affected by overseas volatility earlier, the disclosure of domestic interim earnings forecasts is expected to gradually bring them into a re-allocation zone. Within the storage, optical fiber & cable, liquid cooling, and electronic special gases sectors, several companies have already disclosed bright interim earnings forecasts, verifying the high景气 of the AI industry chain in Q2. Subsequent earnings forecasts from leading core companies are expected to serve as even stronger catalysts. Specifically, for the North American computing power chain represented by optical communications and PCBs, the earlier computing power rally had "contracted" to the storage industry chain and recently fell significantly due to overseas influences. Currently, the valuation gap between A-share North American computing power chain leaders and domestic computing power chain leaders has accelerated back to levels seen last June, and the resulting allocation signal deserves attention. Additionally, before the US earnings season arrives in mid-to-late July, the market may still seek out some domestic, low-positioned sectors with strong performance for catch-up rallies. Currently, these mainly include the lithium battery industry chain, innovative drugs, securities firms, agricultural chemicals, petrochemical refining, and broiler chickens.
Shenwan Hongyuan Strategy posits that if capital inertia is broken, a new round of上涨 will be more diversified. Meta's "selling computing power" cannot yet be considered as "computing power过剩," but for market narratives, the shift from "computing power demand exists as long as there is investment" to "stratified computing power demand" also represents a kind of "second derivative turning negative." The market showed significant divergence in May-June; while fundamental divergence objectively exists, divergence in capital flows was even more pronounced. In the short term, controversial fundamental outlooks combined with unstable microstructures make pessimistic narratives容易被定价. Furthermore, with the推进 of the IPO process for a leading domestic storage company, it is判断 that the technology sector rally will continue in a "tug-of-war" phase. The view remains that the AI industry trend is the main battlefield in this major波段行情, with computing power inflation being the primary source of high elasticity in细分 industries. For a more diversified direction, securities firms are the首选. Simultaneously, strategic resources benefit from a缓和 in Fed tightening expectations in the short term; attention is also on export/出海 chain Alpha and new consumption.
Zheshang Securities suggests that the adjustment in the ChiNext and STAR 50 indices is accompanied by rebalancing, advising to control elasticity and wait for opportunities. Looking ahead, as spillover volatility from overseas markets led to significant adjustments in AI-related industries, the offensive in the ChiNext and STAR 50 indices that began in early June is likely over for now. Both the ChiNext Index and the STAR 50 Index need adjustments after the offensive. Meanwhile, most non-AI indices have recently shown range-bound震荡 and are expected to maintain this state during the adjustment period for the dual indices when the market lacks a leading sector. It is important to note that the current level of adjustment is not sufficient evidence to conclude the bull market for the dual indices; optimism remains regarding the medium-term trend for both the dual indices and the A-share market overall. Regarding allocation, based on the judgment that "the dual indices face阻力 and need adjustment, while other indices range-bound震荡," the建议 is: absolute return positions and short-term positions holding the dual indices should注意 controlling elasticity on rallies, while remaining相对 return positions and medium-term positions can continue to be held. When the Shanghai Composite Index pulls back to test previous lows, forming a "golden右脚," allocation can be适当 increased. Sector-wise, continue关注 the already strong securities sector while increasing关注 on the recently impressive innovative drug sector, but avoid chasing highs; wait for the aforementioned sectors to回落 to their "initial阳线" levels before介入.
Everbright Securities asks to whom the "baton" in technology will be passed. Recent volatility in the technology sector has increased significantly, possibly related to high valuations and substantial prior gains, while also being明显 affected by external risk appetite factors. Referring to the historical experience of two rounds of AI sector adjustments in 2025: during short-term AI pullbacks, capital did not脱离 the growth style but rotated towards lower估值 directions within the sector. In 2025, new consumption, innovative drugs, commercial aerospace, and precious metals all became important rotation directions. After adjustments ended, AI often became the market's main theme again, but the focus of the rally might shift. In terms of allocation direction, besides the technology main theme, it is建议 to重点关注 the export chain and resource products: the export chain benefits from resilient external demand and持续利好 from global supply chain restructuring; resource products have stronger certainty for profit improvement against the backdrop of accelerating PPI回升. Additionally, attention can be paid to previously lagging thematic directions like innovative drugs and robotics.
Huajin Securities states that technology may still be the main theme during the earnings season. In the short term, continue to focus on technology and cyclical sectors with strong performance. Firstly, sectors like TMT, electric power & new energy, pharmaceuticals, and energy metals are expected to have relatively high盈利增速 for 2026. This includes growth primary industries like power equipment, computers, and electronics, as well as growth secondary industries like生物制品, software development, and advertising & marketing, along with cyclical secondary industries like energy metals, rubber, and minor metals. Secondly, the current建议 is to continue逢低配置: one, sectors with upward政策 and industry trends such as electronics (semiconductors, AI hardware), communications (AI hardware), robotics, defense (commercial aerospace), innovative drugs, non-ferrous metals, chemicals, electric power & new energy (AI power, lithium batteries), computers (AI applications), and media (AI applications, gaming); two, blue-chip sectors where fundamentals may improve, such as securities and consumption.
Huaan Securities sees an opportunity for a "strong切换强" dynamic, suggesting the cooling off is not the终结. Overall, the following two investment clues and节奏 should be着重关注. The first core主线 is the AI industry chain, particularly focusing on upstream and midstream computing power hardware segments. While medium-term opportunities in electronics remain unchanged, communications offer明显 higher性价比 in the short term. The second stage of the AI industry cycle rally is being verified and will持续. According to the time, space, and structure patterns of第二阶段行情, upstream and midstream segments of the AI industry chain possess显著涨幅 advantages with considerable time and space potential. During this process,节奏 can be further precisely grasped through turnover rates. Medium-term opportunities remain, but in the short term, communications with low turnover rates offer better性价比 compared to electronics. It is建议 to短期更加重视 computing power center环节 and supporting directions: optical modules, PCBs, CPO, optical fibers, liquid cooling, data centers, etc. The second主线 includes sectors有望受 AI chain扩散 and催化, mainly comprising defense, machinery, robotics, gaming, and software. This chain is also mostly an extension of the current AI industry chain's upstream and midstream, e.g., machinery benefits simultaneously from the景气上行 cycle in engineering machinery and辐射 from multiple themes like robotics, commercial aerospace, liquid cooling, and high-end manufacturing. The defense sector is有望跟随 the ChiNext Index上涨. Robotics, gaming, and software are the downstream directions most有望承接 the diffusion of the AI computing power theme.
Ping An Securities believes funds may rotate in July from previously high-crowding sectors towards directions with high earnings certainty and reasonable valuations. The interim report earnings verification period in July may加剧资金分化 between sectors. With a return to fundamental trading, funds may rotate from previously high-crowding sectors towards directions with high earnings certainty and reasonable valuations. Structurally: First, the AI industry chain remains an absolute high景气 direction;关注 AI core computing power components, upstream materials & equipment benefiting from溢出, and other areas with accelerating景气上行 (optical modules/storage/PCB circuit boards/semiconductor materials, etc.). Second,关注周期 and manufacturing sectors in the upper part of the "K" shape (power equipment/machinery/chemicals/non-ferrous metals, etc.), which are有望受益 from earnings定价 by funds during the财报季. Third, dividend assets still possess good defensive配置 value, especially可以关注细分 directions with upward景气 (non-bank finance/utilities, etc.).
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