Zhongyuan securities: A-shares are expected to continue the structural market trend in June, with growth and value stocks continuing to rotate.

Zhongyuan Securities stated that overall, in June, A-shares are expected to continue the structural market under the resonance of policy support and profit recovery. On one hand, economic data released in May exceeded expectations, with good performance in industries, consumption, and import and export, providing fundamental support for A-shares. At the same time, with 9 shareholding banks following to lower deposit rates, it may drive funds to migrate to the equity market, bringing incremental funds to A-shares. On the other hand, from a policy perspective, a package of financial policies release signals for stable growth and cost reduction, such as a 0.5 percentage point reduction in reserve requirement ratio, a 0.1 percentage point reduction in policy interest rates, adjustments in structural monetary policy tools and personal housing loan rates, all helping to improve market liquidity environment and benefiting the trend of A-shares. In terms of allocation, the rotation pattern between growth and value still persists recently, so it is recommended for investors to focus on two main lines: first, focusing on stocks in the computer, components, electronics, and communication sectors that boost domestic consumption and industrial demand; second, focusing on undervalued and defensive sectors with high dividends such as banks, coal, petroleum, and petrochemicals.