CSI 300 Drops 1.54%
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A-shares continued to face “upward resistance,” with major indices experiencing a weekly pullback and multiple key moving averages acting as pressure levels, leading to a further cooling of short-term risk appetite. The SSE Index(000001) fell 1.0% for the week, dropping below its 5-, 10-, 20-, and 50-day moving averages, and now sits only slightly above its 200-day moving average. The index has shifted from “consolidation at high levels” to a more pronounced pullback; trading volume on the final day was approximately 5.79% higher than its 50-day average. The CSI 300(000300) dropped 1.54% for the week, falling back below its 5-, 10-, and 20-day moving averages but remaining above its 50- and 200-day moving averages. Volume on the last day was about 25.32% above its 50-day average. Increased volume during the decline indicates widening divergence among heavyweight stocks, with institutional portfolio rebalancing exerting phased pressure on the index. Growth indices also pulled back in tandem: the Shenzhen Index(399001) fell 1.67% and the ChiNext(399006) dropped 1.98% for the week. Both slipped below their 5-, 10-, and 20-day moving averages amid slightly lower volumes, reflecting increased capital caution and diminished willingness to chase rallies. However, their medium-term trends remain intact as both indices are still significantly above their 50- and 200-day moving averages.
In Hong Kong, the Hang Seng Index(HSI) declined 0.88% for the week, continuing to trade below its 5-, 10-, 20-, 50-, and 200-day moving averages. However, trading volume on the final day was roughly 21.61% higher than its 50-day average. This increased volume during a down week suggests rising divergence and turnover. While there may be some technical rebound momentum in the short term, reversing the weakness will require reclaiming key moving averages first, accompanied by sustained volume support. Overseas markets saw heightened volatility but retained resilience: the Nasdaq Composite(0NDQC) dipped 0.53% for the week, maintaining high-level operations following annual highs and staying well above its 50- and 200-day moving averages. The S & P 500 Index(0S&P5) edged up 0.06%, similarly holding in a high-level range.
Recent U.S. data points to strong economic momentum, making it harder for monetary policy to pivot toward easing. The May ISM Manufacturing PMI rose to 54 (above the expected 53 and previous 52.7), signaling accelerated manufacturing expansion. ADP private payrolls added 122,000 jobs, also surpassing expectations and prior figures, indicating that demand remains resilient. Although initial jobless claims for the week rose to 225,000—higher than both the previous reading and forecasts, showing marginal cooling in employment—this is insufficient to quickly reverse market pricing for “higher interest rates for longer.” Meanwhile, EIA crude oil inventories saw a massive drawdown (-7.974 million barrels, far exceeding the expected -4.007 million). Coupled with recurring Middle East tensions and geopolitical risks, upside tail risks for inflation driven by oil prices have increased. Market discussions regarding a “July rate hike” or the “disappearance of the final rate cut dot in the dot plot” have intensified. Essentially, this reflects concerns that reflation could hinder the rate-cutting path, and dollar interest rate spillovers will continue to impact global funding costs and risk appetite.
Domestic policies reflect a combined approach of “stabilizing growth, strengthening the real economy, promoting transformation, and preventing risks.” On the monetary front, the central bank’s 7-day reverse repo injections were zero for two consecutive days, largely representing “peak shaving and valley filling” liquidity management: reducing short-term injections when funding conditions are relatively stable to prevent idle capital circulation, while preserving room for precise interventions at critical junctures later. On the fiscal and livelihood front, the central government allocated RMB 99.9 billion in childcare subsidies, aiming to support consumption and long-term demographic expectations by lowering the costs of childbirth and child-rearing. This serves as a policy lever to “stabilize domestic demand through improving people’s livelihoods.” On the investment and supply side, the State Council issued the Plan for Accelerating Agricultural and Rural Modernization During the “15th Five-Year Plan” Period, emphasizing food security, agricultural technology, and county-level industries to enhance endogenous supply resilience. Statements such as “forging a solid foundation for the real economy” and “mutually reinforcing debt resolution and development” indicate that while controlling local government debt risks, resources will be increasingly directed toward projects capable of generating cash flows and improving efficiency.
In the tech and capital markets sectors, the Ministry of Industry and Information Technology (MIIT) launched joint provincial-ministerial 6G pilot programs, Shanghai optimized computing power infrastructure, and authorities pushed for the listing of derivatives tied to the STAR 50, Shenzhen 100, and ChiNext indices. These moves reflect a dual approach of “industrial upgrading plus improved risk hedging tools”: using new infrastructure like computing power and telecommunications to consolidate long-term tracks for AI and advanced manufacturing, while utilizing derivatives to enrich pricing and hedging mechanisms, thereby enhancing capital markets’ ability to serve technological innovation. Concurrently, a surge in new account openings and discussions around “capital clustering in tech leaders” highlight the need to watch out for crowded trades and overheated themes, elevating the importance of regulation and information disclosure. The implementation of detailed rules for rectifying cross-border investments also underscores a greater emphasis on compliance, anti-money laundering, and investor protection in opening up, aimed at reducing regulatory arbitrage risks.
Externally, frictions surrounding chip export controls, WTO rules, and EU cybersecurity regulations persist. Domestic policy is likely to continue addressing external uncertainties through a combination of “stabilizing foreign trade channels and achieving self-reliance in key technologies.”
At the sector level, leadership has shifted toward a more defensive combination of “energy supply assurance + telecom infrastructure,” which better aligns with risk appetite during the current phase of upward resistance in A-shares. Energy-Coal(G1319IG.CN) gained approximately 7.06% for the week. Against the backdrop of another massive EIA crude inventory drawdown (-7.974 million barrels) pushing up energy inflation expectations, alongside domestic emphasis on forging a solid real economy foundation and ensuring energy supply resilience, coal stocks are more likely to attract defensive and high-dividend capital allocations. However, short-term willingness to chase rallies remains weak, reflecting more of a rotational characteristic. Telecom-Fiber Optics(G3552IG.CN) rose about 6.38%. Supported by MIIT’s push for joint 6G innovation pilots and policy catalysts from various regions optimizing computing facility layouts, the medium-term logic remains intact, though it is better suited for accumulation after pullbacks and confirmation via renewed volume increases. Telecom-Consumer Prods(G4894IG.CN) climbed around 5.17%, leaning toward terminal device replacement cycles and elasticity in the consumer electronics chain. It is more heavily influenced by market discussions on “clustering” in tech leaders, and its sustainability relies more on fundamental realization and volume-price coordination.
Regarding individual stocks and portfolios, the Top 33 selection saw an average weekly decline of 0.98%, with 12 advancing and 21 declining, indicating narrowing structural opportunities. Leading the gains was Nanjing Sunlord Electronics(300975), up 25.10% for the week, boasting an O’Neil Score of 67, RS Rating of 99, EPS Rating of 86, Acc/Dis Rating of A+, and an industry rating of 9. In weak markets, stocks with high relative strength ratings tend to attract concentrated capital inflows, but they also require accumulation during pullbacks and renewed volume at key levels to avoid amplified volatility at high positions.
During this phase of “upward resistance,” investors should maintain vigilance: position building is best approached by waiting for the index to halt its decline and for leading stocks to show renewed signals of “volume breakouts or holding support during pullbacks.” Screening efforts should focus on sector leaders ranked within the top 40 for industry strength, possessing an Acc/Dis Rating no lower than C, and maintaining intact technical chart patterns.
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published on June 5, 2026