A-share closing review | A-share opened the door to May with a good start! Trading volume surpassed 3 trillion, ranking sixth for the year. However, is there a hidden worry behind the rise in volume and price?

On May 6th, the A-share market rebounded and fluctuated, with the Sci-Tech Innovation 50 Index rising more than 9% at one point, approaching historical highs. Trading volume significantly increased, with a total turnover of 3.23 trillion yuan in the Shanghai and Shenzhen stock markets, ranking sixth so far this year, an increase of 485.9 billion yuan from the previous trading day. By the close, the Shanghai Composite Index rose by 1.17%, the Shenzhen Component Index rose by 2.33%, the ChiNext Index rose by 2.75%, and the Sci-Tech Innovation 50 Index rose by 5.47%. On the market, hard technology led the way, with a global "AI narrative trading" market taking place. Most thematic concepts rose, with local profit-making effects exploding, and some funds began to realize profits in the afternoon. Some market analysts stated that the technology growth sector gathered strong upward momentum today, indicating the possibility of continued upward momentum tomorrow. However, multiple quantitative indicators show that the short-term trading congestion of strong attack sectors such as electronics has reached a high level. When consensus expectations are too strong, technical selling pressure and profit-taking often come unexpectedly. This consensus expectation is often a leading indicator of a short-term peak. Looking back at the market, the Sci-Tech Innovation 50 constituent stocks continued their sharp rise, with Hygon Information Technology, Biwin Storage Technology rising more than 15%, and Cambricon rising more than 7%. CPU, semiconductor, and storage chip concepts all surged, with multiple stocks like Shenzhen Longsys Electronics and Netac Technology hitting the limit up. Concepts like digital economy, domestically produced computing power, and computing power leasing were strong, with stocks like Business-intelligence Of Oriental Nations Corporation and Guangdong Hec Technology Holding hitting the limit up. Concepts related to computing hardware such as optical modules, PCBs, liquid cooling, composite copper foils, and optical fiber cables all rose, with multiple stocks hitting the limit up. Satellite internet, commercial aerospace concepts continued to rise, with stocks like Western Metal Materials and Tongyu Communication Inc. hitting the limit up. Securities firms, internet finance concepts were strong, with stocks like Changjiang and Hebei Huijin Group hitting the limit up. Gold, minor metals, non-ferrous metals concepts rose in the afternoon, with stocks like Shenzhen Zhongjin Lingnan Nonfemet and Guangxi Huaxi Nonferrous Metal hitting the limit up. AI applications, military industrial chain, transformers, humanoid Siasun Robot & Automation, electricity concepts all rose. In terms of declines, ST concept stocks experienced a wave of limit downs, with more than 60 stocks hitting the limit down, including ST XinYuan and ST NanDu with several stocks hitting 20% limit downs. The oil and gas industry chain, oil and gas pipelines, oilfield services, natural gas, and petroleum concepts had leading declines, with Zhongman Petroleum And Natural Gas Group Corp., Ltd. falling by over 7%. Large consumer concepts like liquor, duty-free shops, hotel catering, and tourism all declined, with stocks like Wuliangye Yibin falling by nearly 5%. Chemical concepts like caustic soda, urea, methanol, glyphosate all saw declines, while banking, insurance, breeding, agriculture, football revitalization concepts performed weakly. Looking ahead, BOC International believes that the A-share market may continue its upward trend during the post-holiday period. The focus will be on two core themes: AI technology and resource energy security. Industrial also believes that with the effective mapping of global technology stocks in the US stock market during the holiday period and continued verification of performance trends in related directions in the first quarter, the domestic AI hardware industry chain remains a structural highlight that is likely to continue to shine in the post-holiday A-share market performance. Top hot sectors: 1. The storage chip concept surged The storage chip concept surged, with Shenzhen Techwinsemi Technology, Shenzhen Longsys Electronics, and Netac Technology hitting the limit up to achieve historical highs. Comments: On the news front, on May 4th, South Korea's leading technology stock SK Hynix rose 12.52%, setting a new all-time high. In addition, US storage chip stocks such as SanDisk, Seagate Technology, and Micron Technology also hit new all-time highs. 2. Computing power leasing concept rising The computing power leasing concept exploded, with more than ten constituent stocks hitting the limit up, including Jiangsu Lettall Electronic with 4 days of limit ups, Dawei Technology (Guangdong) Group, Guangdong Hec Technology Holding, and Mcc Meili Cloud Computing Industry Investment hitting the limit up. Comments: On the news front, on May 5th, Guangdong Hec Technology Holding announced that its subsidiary Dongguan Guangdong Hec Technology Holding Cloud Wisdom Computing Technology Co., Ltd. officially signed a framework contract for computing services with leading company A, with a total contract amount expected to reach 16-19 billion yuan (including tax) with a contract period of 60 months after the order acceptance. 3. Active performance of commercial aerospace concepts The commercial aerospace concept was active, with Western Metal Materials and Lubair Aviation Technology hitting two days of limit ups. Comments: On the news front, SpaceX's IPO registration documents showed that the Starship project has invested over $15 billion, and the company is about to launch an upgraded prototype. SpaceX plans to launch the first batch of new and more powerful "Starlink V3" satellites in the second half of 2026. Institutional views: BOC International: External disturbances with internal support, post-holiday focus on "dual main theme" The A-share market may continue its upward trend during the post-holiday period, with a focus on two core themes: AI technology and resource energy security. The current market is gradually shifting from geopolitical games to self-profit and policy-driven logic. It is expected that the A-share market will maintain the upward trend during the post-holiday period. On one hand, the first quarter A-share performance continues to recover, official PMI data continues to improve, providing profit support for the A-share market. In addition, the positive performance of US stocks, Hong Kong stocks, and Chinese assets during the holiday period, combined with high trading volume before the holiday, indicates strong market trading intentions. However, attention should also be paid to potential impacts from overseas Fed policies and trade policy changes. In terms of allocation, technology and resources are the two main themes currently. 1) Technology AI industry chain: The strong performance of the US AI sector during the holiday period, with Apple's better-than-expected financial report and Intel's high growth in AI business, is expected to have a significant emotional impact on A-share AI computing power and AI application-related targets post-holiday. But attention should be paid to internal structural differentiation, the conversion from crowded high positions in the previous stage to lower positions, and the transition to technology hardware and controllable autonomous chain with higher performance certainty; 2) Resources and energy security still have allocation value, in the short term, they may act as core points for hedging geopolitical and inflation risks, with the potential for a revaluation of industrial and financial attributes in the medium term. The small metal sector showed some performance before the holiday, and the market continues to focus on geopolitical changes and policy paths during the holiday, so it is highly likely that the resource sector will continue to receive high attention post-holiday. Huajin Securities: A-shares may fluctuate slightly higher in May Currently, it seems that A-shares in May may fluctuate slightly higher this year. (1) In May, policies may still be leaning towards positive, with external risks easing. One is that positive domestic policies may be further introduced and implemented in May. The second is that external risks may ease in May. (2) Economic and profit fundamentals in May may continue to rebound. Economic recovery may continue in May. Short-term corporate profitability may further improve. (3) Liquidity in May may remain loose. Monetary liquidity may remain loose in May. Capital inflows into the stock market may continue to rise in May. Industry allocation in May: Continue to buy low in technology growth, some cyclical and consumer industries. Industrial: Domestic AI hardware industry chain may become a structural highlight For A-shares, with effective mapping of global technology stocks in the US stock market during the holiday period and continued verification of related performance trends in the first quarter, the deeply linked domestic AI hardware industry chain (representative of optical communication, storage) resonating strongly with global AI industry trends is the most promising direction, likely to continue to be a structural highlight in the post-holiday A-share market performance. This article is reproduced from "Tencent Stock Picks," GMTEight edited by: Jiang Yuanhua.