Group 1 - The A-share market showed a positive trend in the week, with major indices rising, particularly the ChiNext and CSI 500, while the Shanghai Composite Index lagged behind [1][17] - The market exhibited an "N-shaped" trend in the first half of 2025, with the Shanghai Composite Index increasing by 2.2% from the beginning of the year to June 27 [2][21] - The performance of various industries was notably divergent, with non-ferrous metals and banking sectors showing significant gains of 18.0% and 13.5% respectively, while coal and real estate sectors faced declines of 12.6% and 7.4% [3][31] Group 2 - The A-share market experienced active trading, with an average daily turnover exceeding 1.3 trillion yuan, reflecting a year-on-year increase of 61% [4][46] - The net inflow of funds into stock ETFs reached 1.6 billion yuan during key periods, indicating a recovery in market liquidity [4][49] - The issuance of equity funds rebounded significantly, with over 250 billion yuan issued in the first half of the year, marking a substantial increase compared to the same period last year [4][47] Group 3 - The report highlights three main investment themes: domestic consumption, domestic substitution, and sectors underweight by funds, which are expected to attract attention in the medium to long term [5][65] - The focus on domestic consumption is driven by recent policy initiatives aimed at boosting domestic demand, which is anticipated to enhance the performance of related sectors [5][66] - The domestic substitution theme reflects the potential for certain industries, such as technology and defense, to benefit from reduced reliance on foreign products, although challenges remain in achieving substantial progress [5][67]

Group 1 - The A-share market experienced a pullback this week due to a decline in risk appetite, influenced by deteriorating geopolitical conditions overseas. Most major indices fell, with the ChiNext Index showing the largest increase of 0.2%, while the Sci-Tech 50 Index had the largest decline of 1.9%. Currently, the valuation of the Wind All A Index is at a historical medium level since 2010 [1][13][15] - In terms of industry performance, there was a divergence in the performance of the Shenwan first-level industries this week. Non-ferrous metals, oil and petrochemicals, and agriculture-related sectors performed relatively well, while food and beverage, home appliances, and building materials sectors saw significant declines [1][15][24] Group 2 - Recent turmoil in the Middle East, particularly Israel's strikes against Iran, is not expected to have a significant impact on the A-share and Hong Kong markets. Historically, the impact of Middle Eastern tensions on these markets has been minimal. The low share of the Middle East in China's import and export trade also contributes to the limited effect on the domestic economy [2][3][21] - The short-term impact of the Middle East situation on industry performance is expected to be minimal. In the long term, the effect will depend on the duration of the conflict. A shorter conflict may benefit growth sectors, while a longer one could favor resource, transportation, and dividend sectors [2][3][39] Group 3 - The market is anticipated to maintain a consolidation state, with three main lines of focus: domestic consumption, domestic substitution, and sectors that are currently underweighted by funds. The expansion of domestic demand is a key focus of recent domestic policies, which may lead to continued policy catalysts [4][18] - The historical data indicates that the average performance of major assets following conflicts in the Middle East shows that the A-share and Hong Kong markets do not experience significant declines. The average performance of the Wind All A Index and the Hang Seng Index remains stable, with a tendency for narrow fluctuations [24][25][29]

Core Viewpoint - The A-share market has shown signs of recovery due to increased risk appetite, with the ChiNext index leading the gains at 2.3% while the Shanghai 50 index saw the smallest increase of 0.4% [3] Market Performance - The overall A-share market experienced a divergence this week, with major indices generally rising. The valuation of the entire A-share market is currently at a medium level historically since 2010 [3] - The communication, non-ferrous metals, and electronics sectors performed relatively well, with respective increases of 5.3%, 3.7%, and 3.6%. In contrast, the household appliances, food and beverage, and transportation sectors saw declines of 1.8%, 1.1%, and 0.5% [3] Domestic and External Factors - Recent domestic events include the launch of the "Service Consumption Season" by the Ministry of Commerce and the deployment of policies for the 2025 New Energy Vehicles initiative. Externally, significant events include a phone call between Chinese President Xi Jinping and U.S. President Trump, and the SEC tightening regulations on foreign companies listed in the U.S. [4] - The domestic economy remains stable, supported by growth policies, which are expected to provide a cushion for the market. Despite potential market fluctuations, supportive funds are likely to flow into the stock market to stabilize it [4] Market Outlook - The market is expected to maintain a consolidation phase, with external risks potentially limiting further upward movement. The current level of the Shanghai index is near the points seen in early April, making upward breakthroughs challenging [5] - Short-term external risks may have peaked, but vigilance regarding Trump's policy changes is necessary. Domestic policies are expected to continue to be implemented, with consumption remaining a key driver of economic recovery [5] Investment Focus - Attention should be given to three main lines of investment: 1. Domestic consumption, with a focus on home goods, food processing, professional services, and leisure foods, as policies to expand domestic demand are expected to catalyze growth [6] 2. Domestic substitution, focusing on industries with high import ratios from the U.S. and strong domestic supply capabilities, such as publishing and building materials, as well as sectors like aerospace equipment and medical devices that are expected to improve domestic supply [6] Fund Allocation - The "Action Plan for Promoting High-Quality Development of Public Funds" may have a profound impact on fund allocation, with sectors currently underweight by funds, such as banking, non-bank financials, public utilities, and transportation, being worth attention in the medium to long term [7]

Market Performance - The A-share market showed signs of recovery this week, with the ChiNext Index rising by 2.3%, while the Shanghai 50 Index had the smallest increase of 0.4%[1] - The overall valuation of the Wind All A Index is currently at a historical average level since 2010[1] - Among sectors, telecommunications, non-ferrous metals, and electronics performed well, with increases of 5.3%, 3.7%, and 3.6% respectively[1] Economic Factors - Domestic policies aimed at stabilizing growth, such as the launch of the 2025 "Service Consumption Season" and the promotion of new energy vehicles, are being implemented[2] - External factors include a recent phone call between Chinese President Xi Jinping and U.S. President Trump, and the SEC tightening regulations on foreign companies listed in the U.S.[2] - The overall domestic economy remains stable, with a projected resilient economic performance in Q2 due to supportive policies and reduced tariffs between China and the U.S.[2] Investment Strategies - Focus on three main investment lines: - Domestic consumption, which is expected to receive policy support and has shown resilience in earnings[4] - Domestic substitution, targeting industries with high import ratios from the U.S. and strong domestic supply capabilities[4] - Sectors currently underweighted by funds, such as banking and public utilities, which may present long-term investment opportunities[4] Risk Analysis - Potential risks include policy measures falling short of expectations, continued weak consumption data, and significant declines in market sentiment[4] - Concerns over external disturbances, particularly from U.S. policy changes, may hinder market upward movement, especially as the Shanghai Index approaches levels seen in early April[2][3]

Market Overview - The market experienced a rebound on June 4, with the ChiNext Index leading the gains, closing with a rise of 1.11%. The Shanghai Composite Index increased by 0.42%, and the Shenzhen Component Index rose by 0.87% [1] - Over 3,900 stocks in the market saw an increase, with total trading volume reaching 1.15 trillion yuan, an increase of 11.6 billion yuan compared to the previous trading day [1] Sector Performance - Key sectors that performed well included beauty care, beer concepts, and solid-state batteries, while sectors such as airports, unmanned vehicles, and military electronics faced declines [1] - The financial sector, particularly brokerage firms, showed significant movement, reinforcing the overall index performance [1] Investment Sentiment - Market sentiment improved due to the strength of several large sectors, including consumer goods and the computing power industry [1] - Analysts suggest that the market may maintain a range-bound trend until July, with a focus on sector rotation due to low trading volumes [3] Broker Activity - Everbright Securities led the movement in the brokerage sector, with a notable increase of 6.43%, marking the second-largest single-day gain since October 8 of the previous year [8] - The brokerage sector's recent activity is attributed to signals of refinancing and upcoming financial policy announcements expected to positively impact the market [6] ETF Performance - Several ETFs related to securities and brokerage firms showed leading gains, reflecting the positive sentiment in the sector [5] - The communication, rare earth, and battery-themed ETFs also recorded significant increases, indicating a shift in investment focus towards sectors with lower resistance to upward movement [12] Future Outlook - Analysts remain cautious but optimistic, noting that external risks may have peaked, and domestic policies are expected to continue supporting economic recovery [9] - The focus on consumer demand, domestic substitution, and underweight fund allocations are seen as key investment themes moving forward [9]