A-Share Market: After Brief Midday Volatility, Gains Expand Further on Both Exchanges; Major Indices Rise

China's three major A-share indices opened higher on June 21 (Tuesday). After an initial sharp decline, both markets surged, and following brief midday volatility, the gains expanded further in the afternoon.

The Shanghai Composite Index closed up 1.79% at 3,864.37 points. The Shenzhen Component Index rose 4.81% to 14,264.29 points, and the ChiNext Index jumped 7.05% to 3,685.97 points.

Total trading volume on the Shanghai and Shenzhen stock exchanges reached RMB 2.9571 trillion, an increase of RMB 254.9 billion from the previous trading day.

Southwest Securities stated that the current market correction is a normal consolidation following earlier gains, representing a process of risk release and structural optimization, not a fundamental reversal of medium- to long-term trends.

With continued policy support, accelerating inflow of incremental capital, and ongoing validation of industrial fundamentals, the A-share market possesses strong self-repair capabilities and long-term allocation value.

Investors are advised to rationally view short-term fluctuations and focus more on long-term investment opportunities arising from China's economic transformation, technological innovation breakthroughs, and capital market institutional improvements.

CICC noted that since June, as the semiconductor sector began to correct, global markets entered a pullback after a steep rally. This macro cycle has not ended, but the contradiction between strong financing demand and tightening liquidity is becoming increasingly evident, compounded by high market concentration and leverage. Before liquidity eases, markets are entering a 'mid-game rest' phase.

Looking ahead, tactically, CICC believes global market adjustments may continue through Q3, with risks stemming from monetary policy uncertainty, rising financing pressures, and spillover risks from markets such as Japan and South Korea.

Strategically, however, CICC reaffirms that after the 'mid-game rest,' technology-driven rallies are likely to resume, and broad-based safe-haven assets remain attractive. Post-rest, market momentum could broaden within the upper branch of the K-shaped recovery—beyond AI hardware, sectors such as AI applications, industrial stocks, and commodities may enter the second half of the rally.