Today saw a rebound in China's three major stock indices, with the ChiNext Index rising over 2.8% and the STAR 50 Index surging more than 3.8%, both reaching new all-time highs. Trading volume across the two main exchanges expanded to nearly 3.62 trillion yuan compared to the previous session. Overnight, overseas market focus centered on post-market earnings reports from the semiconductor sector. Stronger-than-expected guidance from Micron Technology and Qualcomm bolstered sentiment for chip-related stocks. Meanwhile, reports of progress in negotiations between the U.S. and Iran to end conflict have eased tensions in the Middle East, pushing oil prices lower and largely erasing the geopolitical risk premium. Domestically, May's economic data highlighted a widening divergence between external and internal demand, as well as varying sector performance. Continued strength in the AI supply chain and rising export prices are boosting sentiment in related industries. However, domestic consumption data fell short of market expectations, with retail sales growth turning negative, and industrial production and investment linked to domestic demand remain weak. For the domestic equity market, while digesting concerns over high valuations in tech stocks, close attention should be paid to the latest developments in the AI supply chain and changes in the macroeconomic fundamentals. The market may remain volatile in the near term, suggesting a balanced portfolio allocation could be considered.
Key Developments
On June 24, the People's Bank of China announced that to maintain ample liquidity in the banking system, it would conduct a 500 billion yuan Medium-term Lending Facility operation on June 25. The operation will use a fixed amount, interest rate bidding, and multiple-price winning method, with a 1-year tenor. With 300 billion yuan in MLF maturing this month, this represents a net injection of 200 billion yuan, marking the second consecutive month of increased rollovers, with the increment being 100 billion yuan larger than in May.
On June 24 local time, memory chip giant Micron Technology reported its fiscal Q3 2026 results. Adjusted revenue reached $414.6 billion, an increase of approximately 346% from $93 billion in the same period last year. Adjusted operating income was $336.8 billion, compared to $24.9 billion a year ago. Adjusted earnings per share were $25.11, versus $1.91 in the prior-year period.
On June 24, the South Korean government stated it is in discussions with Samsung Electronics and SK Hynix regarding plans for the next phase of large-scale investment in semiconductor production facilities and indicated that news about a new chip industry cluster will be announced soon. Kim Yong-bum, a policy adviser to the South Korean president, noted that AI industry demand is driving chip demand at an exponential rate, which may require the two companies to accelerate construction of new chip plants. Discussions include the site selection for a second semiconductor cluster's new factories and supporting power and water infrastructure.
Market Performance Summary
On June 25, the three major A-share indices closed higher. The Shanghai Composite Index closed at 4120.28 points, up 0.23%. The Shenzhen Component Index closed at 16344.08 points, up 1.82%. The ChiNext Index closed at 4371.99 points, up 2.84%. The STAR 100 Index closed at 2236.65 points, up 1.17%. Among Shenwan primary industries, Electronics, Building Materials, and Communications led the gains, rising 3.93%, 3.91%, and 2.72% respectively. Petroleum & Petrochemicals, Nonferrous Metals, and Utilities were among the biggest decliners, falling 2.88%, 2.27%, and 1.91% respectively. 1,231 stocks advanced while 4,230 declined.
Capital Flows
Total market turnover was 3.62 trillion yuan, higher than the previous trading day. The balance of margin trading and securities lending stood at 3.02 trillion yuan as of the last close, an increase from the prior session.
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