Electronics and communications lead the surge, and the Innovation and Entrepreneurship Index is rising well! Is the phased top in the A-shares market already near?

May 11th, A-shares rise in both volume and price, the ChiNext Index shows a joyful upward trend, and trading volume climbs to 3.57 trillion yuan. Market differentiation persists, with only 3,121 stocks closing higher, while the main force driving the market upward is technology stocks mainly in electronics and communications, which again lead the gains today.

Interviewees pointed out that incremental funds are entering the market, indicating that it is not a stockholder battle, and funds are clearly “abandoning cycles and chasing growth.” Under the triple drive of “macro narrative logic + Sci-Tech Innovation Board / Growth Enterprise Market performance inflection point + loose liquidity,” A-shares are expected to oscillate upward. In the contradictory mindset of “fear of chasing highs and fear of missing out,” the most taboo is holding no positions and waiting until emotions peak before being forced to enter, or fully loading on a single direction. It is recommended to retain 60% of core positions anchored in technology growth and dividend assets with a “sword-shield strategy,” and the remaining 40% as flexible positions.

Trading volume surpasses 3.5 trillion yuan

Today, A-shares rose in both volume and price, with technology stocks in a jubilant mood. Storage chips, SMIC concepts, AI chips, automotive chips, semiconductors, electronic equipment manufacturing, electronic components, communication equipment sectors all surged, and biomedicine also performed well. Gold concepts, precious metals, and port shipping led the decline, but the drop was relatively mild.

In individual stocks, 3,121 closed higher, with 135 hitting the daily limit; 2,239 declined, with 27 hitting the limit down. Thirty-one stocks had daily trading volumes of no less than 35.7k yuan, mostly in communication equipment, semiconductors, and electronic components, mainly rising. XinYisheng and Zhongji Xuchuang had high trading volumes, with Guangxun Technology hitting the daily limit; Cambrian received 1,200 yuan per share; Lanqi Technology, a manufacturer of electronic equipment, surged over 18%, and Jiangbolong rose nearly 16%.

Looking at sector performance, funds favored the technology sector, intensifying market differentiation. Today, transportation, media, beauty and personal care, social services, environmental protection, food and beverages, and banking sectors declined slightly and performed relatively weakly.

Electronics, communications, and other sectors remained strong, with machinery equipment and power equipment also performing well.

The electronics sector opened high and moved higher, with 19 stocks hitting the daily limit, including Tiancheng Technology, China Shipbuilding Special Gas, Puran Co., Xingfu Electronics, Changchuan Technology, Baibang Technology, all with “20cm” daily limit increases.

The preference for “light” sectors was also evident, with related sectors opening high in the morning and then pulling back slightly before rising again, with 8 stocks hitting the daily limit. Among them, Sanwang Communications hit the limit, and Taichen Optoelectronics, Tongding Interconnection, Zhongci Electronics, and Datang Telecom also reached the daily limit.

Driven by the surge in chips, communications, and other tech stocks, the ChiNext Index showed a joyful upward trend. The Shanghai Composite rose 1.08% to 4,225.02 points, the ChiNext Index rose 3.5% to 3,928.97 points, and the Shenzhen Component rose 2.16%. The CSI 300 and SSE 50 gained over 1%, while the Beijing Composite dipped slightly, but the STAR Market 50 rose 4.65%. According to statistics, in the 25 trading days since April, the STAR 50 has gained nearly 37%, and the ChiNext Index has increased over 23%.

Trading volume is an important indicator. Since May, A-shares have continued to strengthen, accompanied by increased volume. Today, volume expanded to 489.8 billion yuan, with daily trading in Shanghai, Shenzhen, and Beijing reaching 3.57 trillion yuan, comparable to January this year. Leverage funds also continued to heat up; as of May 8, the margin financing balance in Shanghai, Shenzhen, and Beijing reached 2.8 trillion yuan, hitting a year-to-date high.

“Tech Growth Short Squeeze” Market

How to understand today’s big rise in A-shares? With volume surpassing 3.5 trillion yuan and margin financing increasing to 2.8 trillion yuan, does this mean there is support for further upward movement?

Zirui Xing Investment Research Director Xing Yicai pointed out that today’s market is a typical “tech growth short squeeze” scenario. The trading volume expanding to 3.5 trillion yuan indicates that incremental funds are entering, not a stockholder battle. The leading sectors are semiconductors and AI computing power, while gold and shipping are lagging, showing that funds are “abandoning cycles and chasing growth,” and market sentiment has shifted from defensive to offensive.

Liu Youhua, Director of Wealth Research at Pipa Network, analyzed that today’s volume increase is mainly due to the explosive demand for AI computing power globally, which has triggered a rise in storage chip prices, directly igniting the semiconductor industry chain; at the same time, the 7 trillion yuan new infrastructure “Six Networks” has been fully launched, and foreign institutional investors are collectively optimistic, jointly boosting market risk appetite.

Jia Xiaolong, Director of Heizi Capital Research Institute, analyzed that today’s volume-driven market rally is the inevitable result of the resonance of three logical factors, not just emotional venting. First, from the perspective of macro policies and international capital, the market is shifting from stockholder battles to a healthy ecosystem driven by incremental growth. Behind the rise in volume and price is a psychological inflection point where onshore and offshore funds shift from “wait-and-see” to “actively entering”—refinancing balances steadily climb, ETF shares continue to expand, and these micro capital flow data all confirm that incremental funds are rushing in.

Regarding sector performance, Jia Xiaolong believes that the main theme of technology is not short-term speculation but a strategic opportunity of the era. Fields like artificial intelligence computing power, semiconductor equipment, and high-end equipment have both the safety logic of domestic substitution and the industry logic of global technological change, with performance growth and valuation expansion forming a rare double-click window. In contrast, consumer sectors are under pressure due to slow recovery in residents’ income expectations, but this provides an opportunity to “use time to exchange for space,” allowing high-quality consumer assets to quietly accumulate. Once valuations return to a reasonable range, long-term funds are quietly accumulating.

Concerns about a Phase Top

Since May, A-shares have continued to rise, raising concerns: is a phase top near?

“Currently, both the US and Iran have intentions to keep conflicts within controllable ranges. The most intense phase of Middle East conflict has likely passed, and it’s unlikely to see a repeat of the March shock,” said Xing Shi Investment Chief Strategist Official Lei. He added that with Trump’s planned visit to China in May, market sentiment is expected to continue to recover, and investment logic will return to economic fundamentals, industry trends, and corporate profits. In the medium term, the rebound in listed companies’ earnings will be a key driver for the stock market. The profitability of high-growth industries has already been validated. As domestic nominal GDP growth accelerates, corporate profitability recovery will spread across more industries, and the fundamental-driven nature of A-shares is expected to gradually strengthen.

Regarding the future trend, Xing Yicai predicts that A-shares will oscillate upward, with the 4,200-point level of the Shanghai Composite not a top, but the market will not rise straight up either, likely following a “step-in, step-back” rhythm. The core drivers are macro narrative logic + Sci-Tech Innovation Board / Growth Enterprise Market performance inflection point + loose liquidity.

Liu Youhua believes that the future of A-shares may show a pattern of oscillating slightly stronger with structural differentiation. The foundation for a positive market remains, but in the short term, with indices at relatively high levels and some thematic stocks having accumulated large gains, the market may face profit-taking pressure, and the upward pace could slow.

“Pay attention to inflation data, US-Iran negotiations, and Trump’s visit to China,” reminded Mingyu Asset. With ongoing US-Iran negotiations, high oil prices retreating, and the domestic economy showing resilience, along with overall improvement in Q1 earnings, and Trump’s upcoming visit, A-shares may experience oscillating upward and structural differentiation. Sectors with strong industry trends and earnings support are expected to continue outperforming.

Three Major Structural Opportunities

A-shares continue to rise, with technology stocks remaining strong. Should investors chase or retreat? How to manage positions now?

“Regarding position management, it’s important to understand the contradictory mindset of investors ‘fear of chasing highs and fear of missing out,’” Jia Xiaolong said frankly. But at this moment, two extremes are most taboo: one is holding no positions and waiting until emotions peak before being forced to buy; the other is fully loading on a single direction. The ideal approach is to keep 60% of core positions anchored in technology growth and dividend assets with a “sword-shield strategy,” and 40% as flexible positions, allowing for decisive adding on dips and moderate profit-taking during sharp rises. It’s recommended to keep core tech positions steady, using volatility to optimize structure; for consumer sectors, adopt a dollar-cost averaging approach, not rushing to bottom-fish, but planting seeds where no one is paying attention.

“Entering May, the earnings vacuum period, technology growth sectors are likely to continue their strong trend.” Mingyu Asset favors the hard tech track, believing AI demand is high, industry trends are upward, and investment strategies should focus on core sectors like communications, electronics, and computers, as well as related gas turbines, lithium batteries, and energy storage. Also pay attention to less crowded, policy-driven areas like commercial aerospace, robotics, and potential rebound sectors like non-bank financials and food and beverages.

Liu Youhua bluntly states that current market sector differentiation is quite obvious. In allocation, combine policy and performance clues, paying attention to structural rotations within technology. In hard tech, semiconductors and AI computing power remain mid-term main lines, with funds possibly shifting from hardware with large gains to other areas within the AI chain. Outside of tech, also consider sectors with improving prospects and relatively limited gains, such as industrial metals and some chemicals. For tech stocks that have surged repeatedly, adopt a “sell high, buy low” swing mindset, using intraday pullbacks to buy low rather than blindly chasing high-flying thematic stocks.

“At this point, maintaining current positions is sufficient; avoid major changes. Continue increasing positions in electronics and communications sectors, and buy back previously reduced holdings, especially in undervalued non-ferrous metals and chemical sectors after declines.” Xing Yicai is optimistic about several structural opportunities: first, electronics semiconductors/AI computing power, the current strongest main line, with domestic substitution and AI demand double hits, and the cycle just beginning. Second, new energy, driven by supply-demand resonance and rising prosperity, with high sector valuation. After two years of capacity clearing, small and medium capacities exiting, leading companies optimizing their layout, lithium prices stabilizing at 200k yuan, and lithium carbonate prices rising, with midstream materials profits bottoming out and entering a recovery cycle. Third, non-ferrous metals and chemicals, where global turmoil highlights resource scarcity, and related companies’ valuations have fallen, making low-cost entry points.

Reporter Zhu Denghua

Copyeditor Chen Cai