Market Overview - A-shares are expected to face a critical week with the implementation of the new quantitative trading regulations on July 7, which is considered the strictest regulatory policy in the past decade, potentially altering market structure [1][3] News Impact - Key economic data, including June's CPI and PPI, will be released next week, serving as indicators for market sentiment. Lower-than-expected figures may prompt further policy easing, while higher figures could raise inflation concerns [3] - The expiration of tariff issues on July 9 is anticipated to relieve market sentiment, regardless of the outcome [3] - A total of 31.294 billion yuan worth of stocks will be unlocked next week, with the largest amount on Monday, which may impact related sectors [3] Policy Changes - The new quantitative trading regulations impose strict limits on high-frequency trading, with a threshold of 300 orders per second triggering regulatory scrutiny. The cancellation fee has increased to 0.05 yuan per order, affecting the operations of quantitative funds [3] - The abolishment of T+0 for margin trading will prevent quantitative institutions from exploiting short-term arbitrage, which is seen as beneficial for retail investors by reducing information asymmetry [3] External Market Conditions - The U.S. stock market has faced pressure due to Apple lowering its product sales forecast, leading to a 0.73% decline in the Nasdaq index. European markets also showed weakness, with Germany's DAX index down 0.78% due to declining industrial orders [4] - The Hong Kong Hang Seng Index performed relatively well, with Tencent Holdings slightly up by 0.8%, potentially providing some support for A-share technology sectors [4] Technical Analysis - The Shanghai Composite Index has been fluctuating around 3472 points, with a recent peak at 3497 points before a pullback, indicating significant selling pressure near the 3500-point mark. Historical data suggests a potential average decline of 3.5% following similar patterns [4] - The index has shown strong support at 3452 points over the past two weeks, and if it can maintain above 3430 points, the upward trend may continue [4] Capital Flow - There is a noticeable divergence in capital flow, with active funds experiencing significant outflows, particularly from cyclical stocks and diversified financials. Meanwhile, passive funds continue to accumulate, albeit at a reduced pace [5][6] - Northbound capital has recently increased its positions, particularly in consumer and technology sectors, while bank stocks have seen net outflows [6] Investment Strategy - For short-term defensive strategies, high-dividend and defensive sectors such as electricity and coal are recommended, with specific stocks like Huaneng International and China Shenhua offering attractive dividend yields [6] - Mid-term opportunities in technology and small-cap stocks are highlighted, particularly in semiconductor and renewable energy sectors, with specific stocks showing potential for rebound [6] - High-risk stocks to avoid include high-priced weight stocks and those without performance catalysts, especially in light of the new quantitative regulations [6] Conclusion - The market is expected to undergo a "stress test" next week, with key support levels and trading volume being critical observation points. Investors are advised to avoid chasing high-priced stocks and instead consider undervalued technology and high-dividend sectors [7]

Core Viewpoint - The A-share market showed a collective increase in the first half of 2025, with the Shanghai Composite Index rising by 2.76%, while the North Stock 50 Index outperformed with a remarkable increase of 39.45% [1][2]. Market Performance - The Shanghai Composite Index closed at 3444.43 points, up 0.59% on June 30, 2025, with a total trading volume of 63.7 trillion yuan, remaining stable compared to the second half of 2024 [1]. - The Shenzhen Component Index and the ChiNext Index saw smaller gains of 0.48% and 0.53%, respectively, while the North Stock 50 Index had a significant increase of 39.45% [1][2]. - The average A-share price increased by 11.99%, rising from 19.69 yuan to 22.05 yuan, indicating a strong market performance compared to the major indices [2]. Market Structure - The performance of small and mid-cap growth stocks was notably better than large-cap blue chips, with the CSI 2000 Index rising by 15.24% and the CSI 1000 Index by 6.69% [2]. - The STAR Market's composite index increased by 9.93%, but the STAR 50 Index only rose by 1.46%, indicating that large-cap stocks may have dragged down overall performance [2]. Outlook for the Second Half - CITIC Securities predicts that the synchronization of the US and Chinese economic and policy cycles will lead to macroeconomic resilience, favoring growth-oriented stocks in the second half of the year [3]. - Core assets are expected to show significant relative profitability and operational resilience, with a potential revaluation of A-share assets in Hong Kong, which could act as a "blue-chip engine" [3]. - The reform of public fund management is anticipated to shift institutional investors' focus towards core company pricing rather than chasing industry trends, leading to a gradual return to leading companies with pricing power [3].