China's three major stock indices recorded significant gains on June 22nd. The Shanghai Composite Index rose by more than 1.7%, while the Shenzhen Component Index and the ChiNext Index both advanced by over 2%.
Market Analysis
Today saw a broad-based rally across the three main A-share indices. The non-bank financial and non-ferrous metals sectors led the gains, with the ChiNext Index surging more than 2.5%. This strength was primarily driven by a dual boost from a temporary cooling of geopolitical risks and a package of capital market reform policies. Following approximately 18 hours of intensive negotiations in Bürgenstock, Switzerland, the first round of high-level talks between the US and Iran concluded with an agreement to move discussions to the technical level. The establishment of a communication mechanism regarding issues such as navigation in the Strait of Hormuz and the situation in Lebanon represents a positive development, which has helped lift global risk appetite. This has contributed to a decline in international oil prices and a general uptick in Asia-Pacific stock markets.
Domestically, the series of favorable policy signals released during last week's Lujiazui Forum continue to resonate. The clearer outlook for capital market reforms has become a core internal driver propelling the A-share market upward.
Policy Developments
During the 2026 Lujiazui Forum, the China Securities Regulatory Commission announced the expansion of the fifth set of listing criteria for the Science and Technology Innovation Board (STAR Market) to include the artificial intelligence sector. It also pledged support for more "hard-tech" enterprises in fields like quantum technology, bio-manufacturing, and embodied intelligence to list on the STAR Market. The People's Bank of China revealed plans to research the establishment of a special non-bank liquidity support facility and authorized six banks to conduct pilot offshore renminbi foreign exchange trading in the Shanghai Free Trade Zone. The State Administration of Foreign Exchange announced a new package of incremental policies and issued a fresh batch of QDII quotas. These policy measures span multiple dimensions, including capital market system optimization, innovation in liquidity management tools, and high-level financial opening-up, all of which are conducive to boosting market confidence in the medium- to long-term policy environment.
Market Outlook
Looking ahead, the short-term recovery in market risk appetite is expected to continue. However, attention is warranted regarding lingering uncertainties in the external negotiation process and potential shifts in trading sentiment within the technology sector. While the US-Iran talks have made some progress, significant differences remain on core issues such as Strait of Hormuz navigation and the Iranian nuclear program. A firm stance from the US side during the talks even led to a temporary suspension, and the direction of subsequent technical-level consultations requires further observation. Domestically, the policy dividends signaled at the Lujiazui Forum have laid an institutional foundation for the medium- to long-term development of the capital market, helping to stabilize market expectations. The technology and growth sectors still hold allocation value, supported by converging industrial trends and supportive policies. However, following the recent rally, trading concentration in some segments has increased, warranting attention to short-term volatility risks.
Data source: Wind, as of June 22, 2026. Funds carry risks; investment requires caution. Fund managers are committed to managing and utilizing fund assets with honesty, credit, diligence, and responsibility, but do not guarantee that funds will be profitable or assure returns. The past performance of a fund is not indicative of its future results.