A-share market closing review: 3700 stocks in the green! Sci-tech innovation 50 index drops by 5%. Is the technology sector starting to "pay off debts"? Reasons for the adjustment are revealed.

On June 1st, the three major indexes of A-shares collectively experienced a pullback. By the close of trading, the Shanghai Composite Index fell by 0.27%, the Shenzhen Component Index fell by 1.51%, the Growth Enterprise Index fell by 2.15%, and the Science and Technology Innovation 50 Index fell by 5%. Most stocks in the market rose more than they fell, with over 3700 stocks seeing gains. The total trading volume for the day was 2.88 trillion yuan, a decrease of 441.5 billion yuan from the previous day. Domestic main capital had a net outflow of 60.97 billion yuan. The median rise and fall for the two markets was 1.31%. In terms of market performance, AI application end stocks saw a volatile uptrend, with over ten stocks including IReader Technology and Servyou Software Group hitting their daily limit up. The AI PC concept saw significant strength, with stocks like iSoftStone Information Technology and Suzhou Chunqiu Electronic Technology hitting the limit up. The coal sector saw a surge in limit up stocks, with many stocks like Henan Dayou Energy and Zhengzhou Coal Industry & Electric Power hitting the limit up. The electric power and power grid equipment concepts continued their uptrend, with stocks like Guangdong Electric Power Development and Jinneng Holding Shanxi Electric Power hitting their limit up. The chemical industry sector saw a rise, with stocks like Shan Dong Lu Bei Chemical and Lily Group Co., Ltd. hitting the limit up. On the downside, AI hardware and semiconductor sectors continued their previous adjustments, with stocks like Universal Scientific Industrial (Shanghai) Co., Suzhou Dongshan Precision Manufacturing, and Grace Fabric Technology hitting the limit down. The semiconductor chip industry chain as a whole also saw adjustments, with stocks like Suzhou Everbright Photonics and Dosilicon Co., Ltd. dropping by over 10%. Liquor stocks showed a weaker trend, with Sichuan Swellfun falling by over 5%. The innovative pharmaceutical concept also saw fluctuations and declines, with stocks like Hangzhou Bio-Sincerity Pharma-Tech and Shuangcheng Pharmaceutical falling by over 7%. Non-ferrous metals and minor metals also saw fluctuations and declines. In terms of the overall market view, there are two main factors causing the adjustment in technology stocks currently: Firstly, the issue of crowded trading. According to CCB International, the level of market trading concentration, as reflected by the top 5% of stocks' trading volume in the entire A-share market, is currently in an accelerated rising process, reaching a new high since October 2025. However, the trading concentration has not yet reached the historical high of over 50%. Secondly, from the market perspective, the stock of Jiangsu Lettall Electronic, a leader in computing power leasing, hit the limit down, and Grace Fabric Technology, a leader in electronic fabrics, also quickly hit the limit down, affecting the performance of high-valuation technology stocks emotionally. Looking ahead, GF Securities believes that there is still room for the concentration of A-share trading volume to rise. In recent years, A-shares have experienced four waves of technological industry booms, with the proportion of TMT market value and turnover nearing their historical highs. In the face of major industry trends, using historical thresholds as sell signals may lead to premature exit from the market before a major rally, such as with new energy vehicles in 2021 and light module technologies from 2025 to 2026. Therefore, in the face of economic conditions and accelerated performance, indicators like trading concentration, turnover ratio, and market value ratio, which represent crowdedness, may easily fail, while fundamentals and industry trends remain the fundamental indicators for identifying the sustainability of the market trend. Popular Sectors: 1. AI Application End Stocks Uptrend: AI application end stocks saw an uptrend, with stocks like IReader Technology and Servyou Software Group hitting their limit up. The AI PC concept also showed strong performance, with stocks like iSoftStone Information Technology and Suzhou Chunqiu Electronic Technology hitting their limit up. 2. Coal Sector Uptrend: The coal sector continued its uptrend, with stocks like Henan Dayou Energy and Zhengzhou Coal Industry & Electric Power hitting their limit up. 3. Electric Power Sector Strength: The electric power and power grid equipment concepts showed strength, with stocks like Guangdong Electric Power Development and Jinneng Holding Shanxi Electric Power hitting their limit up. 4. Chemical Industry Sector Uptrend: The chemical industry sector rose, with stocks like Shan Dong Lu Bei Chemical and Lily Group Co., Ltd. hitting their limit up. Institutional Views: - Open Source Securities: It's not a decline in technology, but the need to digest crowding. - BOC International: Short-term volatility does not change the AI theme, focus on internal high and low switching and balance. - China Galaxy: The market may enter a phase of "shake consolidation + internal differentiation". - Zhongtai: In June, the index is expected to reach new highs, focusing on three major directions This article was reproduced from "Tencent Self-selected Stocks" and edited by GMTEight.