On June 11th, China's three major stock indices opened lower. At the time of writing, the Shanghai Composite Index was down 0.34%, the Shenzhen Component Index was up 0.01%, and the ChiNext Index was down 0.76%.
Key Sectors in Focus
The oil and gas sector was active at the open. Shares of Keli Co., Ltd. surged over 10%. Shandong Molong Petroleum Machinery Co., Ltd., Tongyuan Petroleum Technology Co., Ltd., Taishan Petroleum Co., Ltd., Potential Energy Eternal Faith Co., Ltd., Beiken Energy Co., Ltd., and Lanyan Holding Co., Ltd. also followed with gains.
In early trading, the electronic special gases sector maintained its strength. Hoyuan Gas Co., Ltd. and Haohua Chemical Technology Co., Ltd. hit the daily limit-up, reaching new historical highs. Zhongchuan Special Gas Co., Ltd., Hangyang Co., Ltd., Yoke Technology Co., Ltd., and Huayi Group Corporation Limited were among the top gainers.
Market Outlook and Analyst Views
Looking ahead, a research note from Founder Securities suggests that the recent pullback following a low-volume rebound is a short-term phenomenon reflecting a temporary disruption in the market's recovery rhythm, and does not alter the medium-to-long-term positive trend. The short-term market is likely to continue a pattern of consolidation and fluctuation, waiting for volume and sentiment to align. Investors should look beyond short-term volatility, adhere to core investment logic, exercise patience during market swings, and select quality stocks based on fundamentals. As sidelined capital gradually enters the market and trading volume expands effectively, the market is expected to resume its upward trajectory after the current consolidation, with structural opportunities continuing to emerge.
Analysis of Active Sectors
1. Oil and Gas Sector Opens Strong
The oil and gas concept was active at the market open. Keli Co., Ltd. surged over 10%. Shandong Molong Petroleum Machinery Co., Ltd., Tongyuan Petroleum Technology Co., Ltd., Taishan Petroleum Co., Ltd., Potential Energy Eternal Faith Co., Ltd., Beiken Energy Co., Ltd., and Lanyan Holding Co., Ltd. also rose.
Commentary: This movement comes as Brent crude oil prices rose above $95 per barrel, gaining 2.31% intraday.
2. Electronic Special Gases Sector Maintains Momentum
In early trading, the electronic special gases sector continued its strong performance. Hoyuan Gas Co., Ltd. and Haohua Chemical Technology Co., Ltd. hit the daily limit-up, reaching new historical highs. Zhongchuan Special Gas Co., Ltd., Hangyang Co., Ltd., Yoke Technology Co., Ltd., and Huayi Group Corporation Limited were among the top gainers.
Commentary: According to market data, the price of 99.999% pure tungsten hexafluoride in China currently ranges from 1,670 to 1,810 yuan per kilogram, representing a surge of approximately 232.7% compared to the same period last year (523 yuan/kg). Major suppliers such as South Korea's SK Specialty and Foosung have officially notified chip giants including Samsung Electronics and SK Hynix of significant price increases for tungsten hexafluoride scheduled for 2026, with hikes expected to be as high as 70% to 90%.
Institutional Perspectives
Founder Securities: Pullback After Low-Volume Rebound is Short-Term
Founder Securities analysis indicates that a low-volume rise itself suggests the rebound lacks sustained momentum. A healthy uptrend requires incremental capital inflow to create synergy. The insufficient volume during yesterday's rebound indicates heavy caution among external funds, with the market primarily driven by existing capital. This shows that bullish confidence is not yet fully consolidated, and previously sidelined funds have not chosen to enter en masse, with the index rise relying mainly on existing holdings. In the absence of new capital to absorb selling pressure, the rebound was difficult to sustain, leading to profit-taking and the subsequent pullback—a normal correction following a price-volume mismatch.
Secondly, this pullback is seen as a routine consolidation within an uptrend, not a cause for excessive concern. The key to determining a trend change lies in the underlying drivers. Currently, China's economic recovery remains steady, policy signals are consistently positive, and the growth logic for core industries remains intact. These fundamental factors supporting the medium-to-long-term market outlook remain solid. This decline serves to digest the technical divergence from the low-volume rebound and further shake out weak holdings, potentially laying a more solid foundation for future gains. Overall, the market remains within a broad framework of upward consolidation.
Thirdly, given the current characteristics, the focus should be on volume changes and sector resilience. Investors should not fixate on daily fluctuations. If selling pressure gradually diminishes during the pullback and subsequent rebounds are accompanied by expanding volume, it would signal improving market sentiment and a return to an upward trajectory. Operationally, maintaining a balanced portfolio is advised—avoiding blind bargain-hunting and panic selling. For solid fundamental stocks in key sectors, the pullback can be used to optimize positions. For speculative plays lacking earnings support, it's an opportunity to reduce risk.
In summary, the pullback after a low-volume rebound is a short-term phenomenon reflecting a temporary disruption in the market's recovery rhythm, and does not alter the medium-to-long-term positive trend. The short-term market is likely to continue a pattern of consolidation and fluctuation, waiting for volume and sentiment to align. Investors should look beyond short-term volatility, adhere to core investment logic, exercise patience during market swings, and select quality stocks based on fundamentals. As sidelined capital gradually enters the market and trading volume expands effectively, the market is expected to resume its upward trajectory after the current consolidation, with structural opportunities continuing to emerge.
SWS Research: Structural Rally Nearing Highs; Broad Upside Awaits Catalyst
Fu Jingtao, Chief Analyst for A-share investment strategy at SWS Research Institute, stated that the A-share structural rally has approached a high zone, with broad-based upside yet to materialize. The period from June to July might see a window for rapid adjustment. Subsequently, more structural factors are expected to integrate into the larger cyclical uptrend, potentially extending its duration. A new round of rally is anticipated in the second half of 2026.
The ability of earnings to justify valuations is crucial. High-growth sectors in favorable trends need strong earnings to validate their valuation support. Sectors that have priced in turnaround expectations early also require subsequent earnings improvements to confirm and sustain their valuations. Over time, the number of sectors demonstrating cyclical improvement is expected to increase, laying the groundwork for a broad cyclical uptrend and a more diversified market advance.
CSC Financial: Recommends "Barbell Strategy" for June Sector Allocation
A research report from CSC Financial suggests adopting a "barbell strategy" for sector allocation in June: on one end, maintain core positions in high-growth sectors like AI, semiconductors, and export manufacturing; on the other end, allocate to high-dividend, stable cash-flow assets to control portfolio volatility. The middle portion can be used for flexible allocations to sectors like cyclical commodities benefiting from price increases, renewable energy recovery, and policy-driven themes.
In May, market focus was highly concentrated on communications, electronics, and the AI hardware chain, indicating that capital continues to price based on industry trends and earnings realization. However, with significant short-term gains and rising trading congestion in the AI chain, it is not advisable to further increase overall AI exposure in June. Instead, allocations should shift within the sector towards lagging segments with improving fundamentals, such as semiconductor materials, equipment/components, PCB materials, and domestic computing power infrastructure.
If the Producer Price Index (PPI) continues to recover and the income-inventory gap improves, the weighting for cyclical sectors benefiting from price increases can be moderately raised, expanding from coal and non-ferrous metals to chemicals, machinery, and transportation. This, however, is contingent on price increases being successfully transmitted to corporate revenue and gross margins.
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