## 1. A-shares: Divergence and Consolidation After Record High Volume

Yesterday (June 22), A-shares just set the second-largest single-day trading value in history—3.76 trillion yuan. All three major indices surged together: the Shanghai Composite closed at 4,163.10 (+1.78%), and the ChiNext Index rose another 2.52% to hit a new all-time high. However, today (June 23), in the early session, all three major indices weakened collectively. By the midday close, the Shanghai Composite was down 0.37%, the Shenzhen Component was down 1.83%, and the ChiNext Index plunged 2.27%. Half-day trading value was 2.32 trillion yuan, down 187 billion from yesterday.

This is a historical pattern of A-shares: it’s difficult to sustain big rallies immediately after such a huge volume. Once the single-day trading value breaks above 3.5 trillion yuan, short-term buy-side demand is often largely consumed. If the market wants to push higher again the next day, it must rely on fresh incremental capital to take over. Yesterday, large financials surged across the board—brokerage and insurance leaders hit multiple daily limit-ups, successfully “handing off” momentum to technology stocks at high levels and becoming a core pillar behind the index breakout. But today, the adjustment pressure from technology stocks has clearly transmitted to the ChiNext.

Structurally, key technology weights such as AI, optical modules, and computing-power complete systems have already reached relatively high valuation and price levels in this round of the rally. In the short term, they are likely entering a phase of range-bound consolidation and digesting realized profits. Technology overcrowding has reached an extreme historical level, making trading-level volatility easier to amplify. Still, extension-type technology upstream sub-sectors and low-level catch-up branches remain active. New materials directions such as computing-power metals and indium phosphide have also produced independent market moves.

In terms of sectors, in the early trading today, chip stocks (power semiconductors and MCU) rose rapidly; the pharmaceutical sector strengthened against the trend; large financials continued to be strong; and phosphorus chemical stocks kept running hot. Meanwhile, declines led in non-ferrous metals, PCB, optical communications, and lithium batteries.

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## 2. Hong Kong Stocks: Harsh Plunge in AI, Hang Seng Tech Hits a New Session Low

Hong Kong stocks have been far more brutal today than A-shares. By midday, the Hang Seng Index fell 1.13% to 23,500.21 points, and the Hang Seng Tech Index plunged 2.21% to 4,448.93 points—both once again refreshing recent adjustment lows.

The AI sector has become the hardest-hit area: Zhipu AI crashed 15.2%, the largest single-day decline since listing, with its market value falling below 1 trillion Hong Kong dollars. MINIMAX-W dropped more than 12%; both Xizhi Technology and Quannuclear Technology fell by more than 7%. Internet/tech stocks weakened across the board: Bilibili fell nearly 5%, JD.com dropped more than 4%, and Tencent and Xiaomi fell more than 3%.

Behind this wave of selling are three layers of logic: first, the overnight surge in the 10-year US Treasury yield—up 12 basis points to 4.38%—pressuring growth stocks that are sensitive to interest rates; second, the AI sector has already gained 34% over the first five months of this year, concentrating profit-taking pressure; third, ahead of China’s June manufacturing PMI (expected to be released on June 30), the market has turned cautious.

At a deeper level, the issue is that AI valuation premiums are being re-examined. The Hang Seng Tech Index’s forward P/E ratio hit as high as 28 times at its May peak, which is 40% above the Hang Seng Index. It has since compressed to about 32%. Zhipu AI’s first quarterly report shows a net loss of 1.8 billion yuan and revenue of only 420 million yuan; for MINIMAX, operating expenses consumed 94% of revenue. With insufficient visibility into profitability, market confidence is being shaken.

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## 3. US Stocks: Tech Giants Lead the Decline, US Treasury Yields Apply Pressure

Overnight US stocks (June 22) saw mixed performance across the three major indices: the Dow rose 0.29% to 51,712.71; the S&P 500 fell 0.37% to 7,472.79; and the Nasdaq tumbled 1.32% to 26,166.6.

Large-cap technology stocks were almost uniformly wiped out: Google fell more than 5%, Amazon fell more than 4%, Microsoft fell more than 3%, Meta fell more than 2%, and Nvidia fell nearly 1%. Only Tesla bucked the trend and rose more than 1%. US Treasury yields moved higher across the board, with the 10-year yield jumping 5.55 basis points to 4.509%, directly weighing on tech stock valuations.

Chinese concept stocks faced pressure as well: Xiaopao Zhi Xing fell more than 5%, Tencent Music fell more than 4%, and Li Auto fell nearly 3%. In commodities, front-month US oil fell 3.21% to 74.08 USD per barrel. Expectations of easing geopolitics are pushing oil prices lower.

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## 4. Macro Mainline: Three Forces Intertwined

The market’s core contradictions currently come from three aspects:

First, expectations of looser liquidity are heating up. While there have been twists and turns in geopolitical conflicts, the trend toward easing is clear. International oil prices have fallen sharply, strengthening expectations of global liquidity easing. Domestically, sluggish consumption growth has led the market to anticipate stronger policy stimulus; declining government bond yields provide evidence.

Second, an “asset scarcity” dynamic drives capital to seek value. Low-valuation and high-dividend names have become the focus of attention for social wealth. The explosive performance of large financials reflects this logic: the sector’s overall valuation sits at a low level within the year, with no significant overhead “high-level trapped” supply pressure to weigh on selling, so resistance to going long is relatively small.

Third, the semi-annual report window is approaching, increasing the importance of earnings. As June comes to a close, market capital is, for safety reasons, gradually increasing the weight it places on earnings fundamentals in pricing. Whether it’s high-growth tech stocks or low-valuation large financials, they ultimately must pass the test of earnings.

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## 5. Outlook for the Next Phase: Style Rebalancing in Progress

In the short term, tech stocks’ high overcrowding needs to be digested, and the market’s style is undergoing rebalancing. The rise of large financials is not a one-day affair: brokerages benefit from heightened trading activity, insurers benefit from a recovery in investment income, and valuations for the sector remain at historic lows with ample room for improvement. However, whether the style switch can succeed still needs observation—AI’s business outlook remains the most certain growth lane right now.

In the medium term, most institutions maintain a relatively optimistic view. Shenwan Hongyuan believes that China’s A-share market is still in a “bottoming” stage, and that a new round of rally could start in the second half of 2026. Incremental capital is accelerating its inflow, and the trend of residents increasing their allocations to equities will fundamentally drive the market higher.

In terms of execution, pay attention to the pace: after such a massive volume, market volatility may be significantly amplified, so avoid chasing into emotional highs in the short term. For positioning, a “balanced offensive and defensive” strategy can be adopted: on one side, maintain core holdings in high-growth bases such as AI and semiconductors; on the other, allocate to assets with high dividends and stable cash flows to control volatility. As the semi-annual report window opens, the ability to deliver earnings will become the key yardstick for testing the quality of each sector.