A-share midday review | Is it accumulating strength or running away? A-shares consolidating under three pressures, ChiNext fell by 0.37% at midday.

On May 12, the three major indexes of A-shares fluctuated and fell back. As of midday close, the Shanghai Composite Index fell by 0.40%, the Shenzhen Component Index fell by 0.89%, and the ChiNext Index fell by 0.37%. The total turnover of the Shanghai and Shenzhen stock markets in the morning was 2.17 trillion yuan, a decrease of 135.4 billion yuan from the previous trading day. According to market performance and analysis from authoritative institutions, the adjustment in A-shares today is mainly due to the following reasons: Firstly, on May 11, A-shares surged with high volume, accumulating significant profit-taking pressure, leading to a natural need for technical correction in the market today. Some analysts pointed out that after a massive volume of trading, it is often difficult to sustain a strong attack, and the market needs time to consolidate at high levels to digest the excess profits. Secondly, institutions like Soochow pointed out that some sectors in the technology direction have experienced excessive short-term gains, with crowded trading and increased divergence in funds, leading to profit-taking pressure. In today's market, sectors like semiconductors and storage chips, which led the gains yesterday, opened weak, which is a normal differentiation after such structural overheating. Thirdly, the situation in the Middle East continues to stir the market. Reports suggest that the UAE, which has long tried to maintain a relative balance between Iran and the West, is now shifting its position and leaning towards using its advanced military power to directly respond to Iranian threats, as Iran continues to launch missiles and drones on Emirati soil, impacting key industries like aviation, tourism, and real estate. Looking ahead, Guosen stated that considering the market has been rising for over a month since March 23, and has accumulated significant gains, as well as high trading congestion in hot sectors like AI hardware, there might be a phase of repeated reversal in the short term after the rapid rise. In terms of market performance, following the AI narrative, power grid equipment and power stocks rose significantly, with stocks like Fujian Nanping Sun Cable, DATANG POWER, Guangdong Shaoneng Group hitting the limit up. The concept of computing power chips strengthened again, with China Greatwall Technology Group hitting the limit up, and Cambricon rising over 5%. Sub-sectors like semiconductor equipment, materials, and advanced packaging also performed well, with stocks like Crystal Growth & Energy Equipment Inc, and Kingsemi Co., Ltd. rising by more than 10%. The fiber optic cable concept fluctuated higher, with Jiangsu Tongguang Electronic Wire&Cable, Hangzhou Cable, Tongding Interconnection Information hitting the limit up. The concept of optical modules saw a rally, with brokerage stocks like China Great Wall hitting the limit up, and Zhongji Innolight rising over 7% at one point, breaking the 1000 yuan mark. The concept of Siasun Robot&Automation was active in the morning, with stocks like Zhejiang Baida Precision Manufacturing Corp. and Jintuo Technology hitting the limit up. Real estate stocks rose during the session, with Shenzhen Special Economic Zone Real Estate&Properties and Shenzhen Zhenye(Group) hitting the limit up. In terms of decline, the antivirus and innovative pharmaceutical concepts weakened at the start of the session, with stocks like Shenzhen Salubris Pharmaceuticals hitting the limit down, and Ningbo Menovo Pharmaceutical, Hualan Biological Vaccine Inc. dropping by more than 7%. Energy metals and non-ferrous metal sectors fluctuated lower, with Nanjing Hanrui Cobalt dropping by over 7%, and China Northern Rare Earth, Shenghe Resources Holding dropping by over 5%. The pork and animal husbandry sectors saw a shake adjustment, with stocks like Zhejiang Huatong Meat Products dropping by nearly 9%, and Tecon Biology Co. Ltd dropping by over 6%. Chemical stocks fluctuated lower, with HeBei Jinniu Chemical Industry hitting the limit down. Popular sectors 1. The CPO concept continues to be active The CPO concept remained active, with the leader of the optical module sector, Zhongji Innolight, breaking the 1000 yuan mark during the session, becoming the second thousand-yuan stock on the ChiNext board. 2. Fiber optic concepts show strength against the trend The fiber optic concept remained strong against the trend, with Tongding Interconnection Information hitting 4 consecutive limit ups and Hangzhou Cable hitting 4 limit ups in 5 days. 3. Power grid equipment sector rises and fluctuates Power grid equipment and power stocks rose significantly, with stocks like Fujian Nanping Sun Cable, DATANG POWER, and Guangdong Shaoneng Group hitting the limit up. Institutional opinions Huaxi: "Red May" main uptrend continues, focusing on the "technology + resources" dual mainlines From an overseas perspective, capital markets have already priced in geopolitical risks, combined with expectations of easing tensions between China and the US, the external constraints on A-shares are weakening. In terms of funding, post-holiday funds are entering the market at an accelerated pace, with margin financing reaching new highs for the year. The average stock price in the A-share market has broken through the highs for the year, reflecting the positive feedback effect of incremental funds entering the market, driving the market to fluctuate upwards. Additionally, the continuous appreciation of the Chinese yuan further enhances the attractiveness of Chinese assets, helping to reduce the risk premium of the stock market and raise valuation benchmarks. In terms of style, the global resonance of the AI technology industry is strengthening the logic of A-share mapping, with high growth in the AI chain exports and mutual verification of Q1 performance reports, further confirming the two major booming directions of technology and resources in A-shares. Guosen: Short-term market may experience repeated reversals after rapid rise Considering that the market has been rising for over a month since March 23, with significant gains accumulated in the previous period, and high trading congestion in hot sectors like AI hardware, there may be a phase of repeated reversals in the short term after rapid rise. There are no signs of overheating yet, and with positive factors driving the market internally and externally, the upward trend in the market remains unchanged. The medium-term technology theme remains unchanged, but there is no need to rush. In the short term, the current congestion in growth industries like communications may be relatively high, while the heat in traditional value sectors like consumption has decreased to low levels, and the subsequent market may spread to low-level sectors. CITIC SEC: Policies are favorable in multiple dimensions, suggest focusing on opportunities in the consumer healthcare sector for left-side layout According to a research report from CITIC SEC, recent policies have encouraged the development of consumer healthcare in multiple dimensions. Considering the comprehensive policy stances, CITIC SEC believes that consumer healthcare presents a long and broad development path, with high potential demand and ample room for growth. At the same time, the valuation of the consumer healthcare sector is at the bottom compared to the past 5 years. With policies pointing in the right direction and business operations recovering, the value of sectoral allocation is highlighted. Leading companies in the first quarter of 2026 have shown resilience in their performance, and CITIC SEC recommends focusing on opportunities for left-side layout in the consumer healthcare sector. The consumer healthcare sector is at a turning point of marginal improvement, benefiting from favorable policies in multiple dimensions and undervaluation, with significant investment benefits and highlighted allocation value in the sector, maintaining a rating of "stronger than the broader market" for the consumer healthcare industry. This article is reprinted from "Tencent Self-select Stocks", GMTEight Editor: Wang Qiujia.