A-share midday review | BSE 50 drops more than 4% in half a day, bank stocks active against the trend, military industry sector heats up again.

On May 22, amid the background of the "stock-bond-currency three-kill" triggered by the overnight U.S. bond auction, A-shares opened with volatile adjustments, with the BSE 50 index falling by more than 4% and over 4100 stocks in the market trading in the green. By midday closing, the Shanghai Composite Index closed flat, the Shenzhen Component Index fell by 0.28%, and the Growth Enterprise Market Index fell by 0.44%. Dongxing research report pointed out that the market is expected to maintain a large range-bound trend until July, due to the market trading volume staying at a low level and unable to support the continuous rise of large-cap stocks. Therefore, the rotational dynamics of hot sectors in the market will be very obvious, even for industries like artificial intelligence and Siasun Robot & Automation where the trend is positive, it is difficult to see overall growth under current trading volume conditions. Therefore, actively participating in sector rotation will be a more reasonable strategy. In terms of market performance, rotation of hot sectors is fast, with many hot sectors experiencing highs and then falling back. The banking sector was active against the trend, with stocks like Bank of Shanghai and Bank of Jiangsu hitting historical highs again. The military industry sector saw a resurgence in popularity, with stocks like Glarun Technology hitting the limit up. After the U.S. market closed, the Nasdaq semiconductor stock Nanwei Semiconductor surged nearly doubled, leading the semiconductor and data center power sectors to temporarily rise, with Hangzhou Zhongheng Electric hitting the limit up. High-priced stocks continue to show divergence, with Chengdu Leejun Industrial hitting the limit up at one point and Nanjing Port and Guizhou Zhongyida hitting the limit down. On the downside, the consumer sector led the decline after hitting highs, with the power, port, and photovoltaic sectors taking the lead in declines. In terms of individual stocks, BYD Company Limited AH shares hit another historical high during the session. On the news front, BYD Company Limited launched its low-cost electric vehicle "Dolphin Surf" in Berlin, and after a strategic adjustment, BYD's sales in Europe are accelerating. BYD COMPANY will be included in the Hang Seng Tech Index starting from June 9th. In addition, Citi has raised BYD COMPANY's target price to HKD 727, saying that the export pattern of passenger vehicles in the first four months of this year is more favorable to the company. Looking ahead, Orient points out that from a technical perspective, the stock index continues its oscillating upward trend, with fast sector rotation, which helps maintain market heat and vitality, and this pattern is expected to continue in the short term. Hot Sectors: 1. Military stocks collectively strengthened, led by military electronics and equipment. Glarun Technology, Sun Create Electronics, Shaanxi Fenghuo Electronics, and Jiangsu Yinhe Electronics all hit the limit up. Comment: A research report from Guotai Haitong stated that with the accelerated evolution of global geopolitical relations, the military industry is expected to open up new growth prospects, and recommended investing in companies closely related to products or businesses with exports. The analysis believes that in the context of intensified great power competition, increasing defense spending is a necessary choice in today's era. With both domestic demand and exports expected to drive high prosperity in the military industry, the development trend is expected to remain positive in the long term. 2. Semiconductor sector rises, with Halo Microelectronics, Hangzhou Zhongheng Electric hitting the limit up, and Sichuan Haite High-Tech, Xi'An Peri Power Semiconductor Converting Technology, and Shinry Technologies following suit. Comment: On the news front, Nanwei Semiconductor announced a partnership with NVIDIA to develop the next generation of 800V high-voltage direct current (HVDC) architecture to provide support for GPU including Rubin Ultra, with its "Kyber" rack-level system power supply. Nanwei's gallium nitride and silicon carbide technology will play a key role in this collaboration. Stimulated by this news, Nanwei's price rose by 195% after the market closed. Institutional views: 1. Central China: Expects the market to steadily fluctuate upward in the short term. Central China points out that domestic policies are entering an observation period, with important meetings setting the tone for stable expectations and strengthening bottom-line thinking, further clarifying the status of domestic demand as the main theme. With a year-on-year GDP growth of 5.4% in the first quarter, strong economic recovery momentum, a turning point in corporate profit growth, and improved cash flow provide fundamental support for the market. With the stabilization and recovery of the RMB exchange rate, enhanced expectations of inflows of foreign capital, and an overall loose liquidity environment, the market is expected to steadily fluctuate upward in the short term, maintaining a structural market trend, with policy support and loose liquidity providing a bottom support for the market. It is still necessary to closely monitor changes in policy, funds, and overseas markets. Short-term advice is to focus on investment opportunities in industries such as automotive, batteries, shipping ports, and chemical pharmaceuticals. 2. Dongxing: Structural market trends continue. Dongxing points out that with the conclusion of the U.S.-China tariff game, the market has returned to a range-bound trend. With the index likely to maintain a strong fluctuating trend, it is recommended to maintain a relatively high position and actively participate in structural investment opportunities. Until July, the market is expected to maintain a large range-bound trend, due to the market trading volume remaining at a low level and unable to support the continuous rise of large-cap stocks. Therefore, the rotational dynamics of hot sectors in the market will be very obvious during this period. Even though industries like artificial intelligence and Siasun Robot & Automation show positive trends, there is currently no solid foundation for overall growth under current trading volume conditions. Therefore, actively participating in sector rotation will be a more reasonable strategy. 3. Orient: The stock index continues its oscillating upward trend. Orient points out that from a technical perspective, the stock index continues its oscillating upward trend.Continuing the trend of fluctuation and rise, sector rotation is happening rapidly, but it helps maintain the market's heat and vitality. This pattern is expected to continue in the short term. In addition, investors should be alert to the sharp decline of related stocks when high-priced stocks are suspended for review. Since the new policy on September 24th, suspension for review has often been an important signal of a stock reaching its peak, leading to a shift in liquidity expectations, a cooling of market sentiment, and a rapid drop in stock prices after a volume fluctuation. Investors need to beware of this type of stock risk.This article is reproduced from "Tencent Select Stocks", edited by GMTEight: Wang Qiujia.