A-Share Market Rebounds: Major Indices Recover, Shanghai Index Holds 3800, Monthly Loss at 6.4%

China's A-share market saw all three major indices rebound on Friday (31st). The Shanghai Composite Index (SSEC) held the key 3800-point level, posting a slight weekly gain of 0.47%, though it closed the month down 6.4%.

The Shanghai Index closed up 0.72% at 3832.26 points, the Shenzhen Component Index (SZI) rose 2.21% to 13578.93 points, and the ChiNext Index gained 3.06% to 3343.96 points. Combined trading volume on the Shanghai and Shenzhen markets reached RMB 2.56 trillion, up RMB 199.2 billion from the previous trading day.

In sector performance, multimodal AI concept stocks surged, with Kimi, ChatGPT, and AIGC leading the gains. Robotics (Unitree), CPO, memory, computing power leasing, and cybersecurity themes remained active. Specifically, software services saw strong gains, with nearly 50 stocks including Hongjing Technology, Weihong Co., Pulian Software, Zhuoyi Information, Sangfor, and Wondershare hitting the daily trading limit. Semiconductor stocks initially rose sharply but later pared some gains.

On the downside, bank stocks fell sharply, with Agricultural Bank of China, Ningbo Bank, and Bank of Communications dropping over 2%, while Bank of China, Industrial and Commercial Bank of China, and Pudong Development Bank declined over 1%. Food and beverage stocks also weakened, with Dongpeng Beverage, Jinzhongzi Liquor, Shuanghui Development, and Shanxi Xinghuacun Fen Liquor all down over 1%. Coal stocks underperformed, with Dayou Energy, China Shenhua, and Huaibei Mining falling over 1%, while Zhongmei Energy, Jizhong Energy, and Gansu Energy Chemical posted逆势 declines.

According to Wind data, among the Shanghai, Shenzhen, and Beijing exchanges, 4,685 stocks rose, 727 fell, and 115 remained unchanged. Per Dazhihui VIP data, 267 stocks across the three markets rose over 9%, while only one fell over 9%.

Yuan Zhuang, Chief Economist at Caixin Securities, stated: 'With the continued “dual easing” policy stance, China’s enhanced ability to respond to external shocks, and the growing resilience and global competitiveness of its industrial chains, the certainty of China’s domestic economic policies and situation is expected to further consolidate the comparative advantages of Chinese assets. This year, A-shares are highly likely to continue a volatile upward trend. In the short term, the market may gradually consolidate its阶段性 bottom around late July, and investors are advised to remain patient and make appropriate adjustments once the trend becomes clearer.'

Liu Yu, Chief Economist at Industrial Securities, said: 'Panic in the tech sector is subsiding, and the market may be at a turning point from a “policy bottom” to a “market bottom.”' He noted that core optical communication stocks declined due to high volume, while some loss-making chips began actively liquidating, indicating the adjustment has entered its later stages. If trading volume and price coordination improve further, capital inflows become more active, and positive industry signals translate into effective buying, the market rebound could be further confirmed—and potentially stronger than the rebound triggered by last week’s policy bottom. However, it remains difficult to clearly determine the rebound’s height at this stage. Until new incremental narratives emerge in the tech sector, loss-making chips and short-term speculative funds may continue to exert selling pressure, making the tech recovery unlikely to be smooth. Therefore, while managing tech-led rebounds, investors should maintain balanced allocations, including high-quality dividend stocks and other fundamentally supported sectors, to navigate potential volatility during the rebound phase.