On June 18th, the three major A-share indices opened collectively lower. The market continued to exhibit a pattern of weakness in Shanghai and strength in Shenzhen, with declining stocks outnumbering advancing ones. In the afternoon, the two markets maintained a narrow-range fluctuation, with the ChiNext Index slightly expanding its gains.

From a sector perspective, the semiconductor and computing hardware supply chains surged once again, with CPO, PCB, and GPU-related stocks leading the gains. Zhongji Innolight saw its total market capitalization surpass that of Kweichow Moutai. Industrial metals, innovative drugs, AI applications, and robotics themes also showed activity. Finance, power, gold, coal, and chemical sectors declined.

At the close, the Shanghai Composite Index was down 0.43% at 4,090.48 points. The Shenzhen Component Index rose 0.94% to 16,030.7 points, and the ChiNext Index gained 2.05% to 4,252.39 points.

Wind statistics showed that 2,057 stocks across the Shanghai, Shenzhen, and Beijing Stock Exchange markets rose, while 3,361 fell, with 105 remaining flat.

The total turnover for the Shanghai and Shenzhen markets was 3,310.1 billion yuan, an increase of 218.4 billion yuan from the previous trading day's 3,091.7 billion yuan. Specifically, Shanghai's turnover was 1,560.5 billion yuan, up 157.4 billion from the previous session's 1,403.1 billion, while Shenzhen's turnover was 1,749.6 billion yuan.

According to DZH VIP data, 145 stocks across the two main boards and the Beijing Stock Exchange rose by more than 9%, while 29 stocks fell by more than 9%.

Semiconductors Continue Sharp Rise, Non-Bank Finance Leads Declines

In terms of sectors, semiconductors continued their significant advance. Stocks such as Jingsheng Co., Ltd. (688478), Yutai Microelectronics (688515), Cambricon (688256), Yihua Co., Ltd. (002897), and Deke Co., Ltd. (300842) hit their daily limit-up or rose over 10%.

Recent analysis pointed out that driven by both artificial intelligence and domestic substitution, the semiconductor sector exhibited high prosperity in the first quarter of 2025 and 2026, achieving high year-on-year growth in revenue and net profit attributable to shareholders, with profit performance notably outpacing revenue. According to SIA data, global semiconductor sales from January to March 2026 increased by 62.51% year-on-year, while domestic semiconductor sales rose by 59.88%, indicating sustained industry prosperity driven by AI demand, with continued tightness in core segments like CPUs, memory, and computing chips. High-prosperity segments such as memory, CPUs, advanced packaging, analog chips, and semiconductor equipment and materials were highlighted for attention.

The pharmaceuticals and biotechnology sector was among the top gainers. Stocks including Haoyuan Pharmaceutical (688131), Aidite (301580), Huasen Pharmaceutical (002907), Andon Health (002432), Haixin Co., Ltd. (600851), and Zhong Sheng Pharma (002317) rose by the daily limit or over 10%.

The machinery and equipment sector performed strongly. Stocks such as BLT (603956), Meichang Co., Ltd. (300861), Wuyang Automatic Control (300420), Lingyun Guang (688400), Jiuzhou Yigui (688485), and Estun Automation (002747) rose by the limit or over 10%.

Non-bank financials led the declines. New China Life Insurance (601336), China Pacific Insurance (601601), Jiangsu Financial Leasing (600901), China Life Insurance (601628), and Ping An Insurance (601318) fell over 5%. PICC (601319) and Guosheng Securities (002670) declined over 4%.

The utilities sector trended lower. Shennan Electric A (000037) and Yudean Electric Power A (000539) hit their daily limit-down. Xichang Electric Power (600505) and Ganneng Co., Ltd. (000899) fell over 8%. Jiawei New Energy (300317), Jiuzhou Group (300040), and Guiguan Electric Power (600236) dropped over 5%.

Banking stocks also moved lower. Xiamen Bank (601187) fell over 7%. Qingdao Bank (002948), Qilu Bank (601665), and Chongqing Rural Commercial Bank (601077) declined over 4%.

A-Shares Remain in a Fluctuating Uptrend

Analysis suggests that A-shares are still within a fluctuating upward range. Following the sustained rebound in the hard tech sector, market trading activity and sentiment have improved. However, style differentiation has once again become extreme, with tech-heavy stocks supporting the indices. Looking ahead, the short-term view remains that, against a backdrop of relatively favorable technical and sentiment conditions, the broader market has largely stabilized and turned positive in stages. However, as major indices face resistance near previous highs, the market may digest overhead selling pressure through repeated fluctuations. Additionally, patience is required for a new market theme to emerge that can take over from the hard tech sector; otherwise, excessive concentration in the tech innovation direction may increase market volatility.

Further analysis indicates that A-shares are highly likely to continue a pattern of consolidation in the short term, with the market dominated by structural opportunities. Attention is focused on the marginal impact of the upcoming Federal Reserve meeting on market expectations and the structural guidance from preliminary half-year earnings reports. From an allocation perspective, the recent adjustment in growth sectors is seen as a healthy correction process. Short-term market fluctuations do not alter the medium to long-term positive trend of the industry, and high-growth tech sectors remain the core allocation theme for the medium to long term. Leveraging this round of adjustment, the focus should be on identifying undervalued segments within hard tech that have solid fundamentals, using high-quality blue-chips with reasonable valuations as a defensive base, and adapting to rotational rhythms. For allocation opportunities, a strategy focusing on "tech sector rotation and defensive positioning" is recommended.

Market observers note that from a thematic perspective, technology and growth remain the core themes. Sectors like AI computing power (core stocks), optical communication (core stocks), and memory chips continue to maintain high industry prosperity. Although trading has become significantly more crowded after sustained performance, reducing overall investment appeal, they remain the focal point for concentrated capital investment. Subsequent volatility may intensify, but these areas still hold numerous opportunities, especially leading stocks in sub-sectors with significant year-on-year earnings growth in the upcoming half-year reports, which are worth continuous tracking. From a technical perspective, the ChiNext Index shows strong intent to challenge previous highs, and the Shanghai Composite Index has successfully held above its moving average system, maintaining the pattern of fluctuating ascent for both markets.

It is also observed that the current market rhythm is driven by a dual resonance effect from geopolitical easing and external market influences, coupled with active market trading on high volume. However, capital remains highly concentrated in the technology and growth direction, with a significant siphoning effect on other sectors. The tech-led rally has persisted for three days, and the ChiNext and STAR Market indices are approaching previous highs. The overall market exhibits extreme differentiation. Future local crowding and resistance near previous highs are two key factors requiring careful consideration in recent decision-making. Current trading volume remains above 3 trillion yuan, so related impacts are relatively mild. However, as the mid-year point approaches, potential increases in liquidity pressure, combined with profit-taking amid crowded trades and short-term resistance, could have a notable impact on the market.