The Shanghai Composite Index rises above 4,200 points, with A-share trading volume surpassing 3.5 trillion yuan

Ask AI · How will the second half of the bull market affect investment strategies?

The trading value of A-shares reached 3.57 trillion yuan, breaking 3 trillion yuan for the fourth consecutive trading day.

On May 11, market sentiment in the A-share market was active. The Shanghai Composite Index closed up 1.08% at 4,225.02 points, while the ChiNext Index rose 3.03%; both hit near 11-year highs. A-shares saw a mix of gain and loss among individual stocks: more than 3,100 stocks rose, but there were 136 stocks that hit the daily limit.

From the sector perspective, semiconductors and the entire chip industry chain surged across the board. Memory and GPU-related directions led the gains, with increases of more than 5%. Concept stocks such as rare earths, optical modules, and stock-trading software were also active. By comparison, sectors including shipping, precious metals, daily chemical products, aviation, and restaurant and tourism posted leading declines.

Meanwhile, Caixin reporters found that as of the close on May 11, the total market capitalization of all A-shares on Wind stood at 134.65 trillion yuan, setting a new historical record.

Yang Delong, Chief Economist at Qianhai Open Source Fund, analyzed that today’s Shanghai and Shenzhen markets continued the upward trend after the holiday. As the Middle East conflict nears its end, A-shares are expected to continue or catch up with the spring offensive rally. The market is likely to see a “red May.” Overall, the current A-share market is entering a phase of accelerated upward movement. The market’s profit-making effect is drawing in more investors to allocate to A-share stocks or funds. The pace of savings shifting into the capital market is expected to accelerate, and the market’s profit-making effect will gradually strengthen.

“A-shares are entering the second half of the bull market,” said Xia Fanjie, a senior strategy analyst at CITIC Securities. Looking ahead to the second half of 2026, the bull market in A-shares will continue. Judging from the pace of the rally and market characteristics, in the second half of the bull market it will be relatively difficult to further expand valuations; the pace of the All A Index’s rise may slow down, showing features of structural differentiation. It is expected that A-shares will experience a structural slow bull market. A structural bull market will be driven by structural optimism and capital clustering. Investors are advised to follow an investment strategy of “seeking prosperity as the guiding principle,” focusing on two major prosperity main lines: the “computing power bull” and the “recovery bull.”

He pointed out that, in reviewing the switching of four typical bull-market main lines since 2005, the current AI computing power main line has not yet reached a stage of widespread bubble formation. The market will not simply be forced to retreat from the technology sector due to valuation overheating. Instead, as industry trends continue to be validated, prosperity will spread along the industrial chain through three layers of logic: shortages and price hikes, exploration of new demand, and capacity squeeze. He recommends paying close attention to optical modules, PCBs, electronic fabrics/CCL, advanced packaging, CPUs, storage chips, liquid cooling and heat dissipation, data center power supply, computing power leasing, and cloud services.

China Europe Fund analysis suggests that, compared with the previously balanced allocation between the technology and energy-chemical lines, technological upgrades in the technology sector and the forward-looking guidance from North American cloud companies have provided stronger marginal catalysts to the sector’s fundamentals. It is recommended to focus on the technology wave and, amid subsequent market fluctuations, gradually tilt the allocation distribution toward the technology main line. Within the technology main line, it is suggested to focus on computing hardware, including storage benefiting from the expansion of AI demand but still constrained by capacity; optical communications and related computing-power infrastructure; and domestically produced computing power benefiting from policies and high levels of industrial prosperity.

Beijing News Caixin reporter Hu Meng

Editor: Wang Jinyu

Proofreader: Liu Baoqing