A-share midday report | Index falls, chip semiconductors lead the decline! Why the adjustment? Focus on these four major reasons

On June 1st, the three major indexes showed weak fluctuations. By midday, the Shanghai Composite Index fell by 0.12%, the Shenzhen Component Index fell by 0.60%, and the Growth Enterprise Index fell by 0.90%. The total turnover of the Shanghai and Shenzhen markets in the first half of the day was 1.96 trillion, down by 161.7 billion compared to the previous trading day. On the market, the AI and PC concept stocks collectively surged, with multiple stocks hitting the limit up. The AI application concept also performed strongly, with multiple stocks hitting the limit up. The coal sector saw a surge in limit up stocks, with many stocks hitting the limit up. The power and power grid equipment concept was active, with stocks like Shenzhen Nanshan Power and others hitting the limit up. Chemical stocks were also on the rise, with stocks like Shan Dong Lu Bei Chemical and Zhejiang Juhua hitting the limit up. On the downside, concepts related to fiber optic cables, optical modules, PCB, and MicroLED saw weakness. Semiconductor chip industry chains continued to adjust, with stocks like Suzhou Everbright Photonics and Beijing YanDong MicroElectronic falling by over 10%. Liquor stocks also weakened, with Sichuan Swellfun falling by over 5%. The innovative drug concept also saw a decline, with stocks like DiZhi Pharmaceutical falling by over 10%. In addition, sectors like diamond cultivation, electronic fabrics, and securities and insurance did not perform well. Looking ahead, BOC International believes that the market may continue to see high volatility in the short term. The valuation of A shares is nearing recent highs, and there is a certain fear of heights sentiment in the technology sector. The four factors influencing the recent adjustment in the technology sector were discussed from multiple perspectives. 1. Shifting fund styles have become a hot topic of discussion, with concerns about high technology holdings in consumer-themed funds. Whether there will be pressure to adjust positions before the quarter ends has become a trading clue in this round of technology fluctuations. 2. The significant gains made in previous periods have led to profit-taking pressures especially in directions like semiconductors, AI computing power, optical modules, and PCB. 3. Market styles are shifting between high and low, with sectors like consumer, finance, coal, and utilities showing relatively better performance. There is a redistribution of funds between high-growth and low-growth sectors. 4. News of large funds reducing holdings in companies like National Silicon Industry Group has disrupted the semiconductor sector and put pressure on the electronics direction. In summary, the technology sector continues to be a positive direction for the market. The high volatility and fear of heights sentiment should be temporary, and the AI industry chain remains a certain and prosperous direction.