On June 16, the Chinese stock market showed signs of a strong rebound, maintaining a bullish trend throughout the day, with the ChiNext Index leading the chargeBy the close, the Shanghai Composite Index had risen by 0.63%, the Shenzhen Component Index by 1.11%, and the ChiNext gained 1.44%. This overall uplift in the market saw more stocks appreciating than depreciating, with over 2900 stocks in the two major exchanges recording gainsThe trading volume for the day reached 10.677 trillion RMB, though it was slightly lower than the previous trading day, indicating a subtle decrease of 47 billion RMBNotably, foreign investment played a significant role as Northbound funds recorded a net purchase of 10.546 billion RMB, with Shanghai Stock Connect netting 4.221 billion and Shenzhen Stock Connect 6.325 billion.

Market analysts believe that the current phase reflects an ongoing balancing act influenced by policy expectations

The anticipated rise fueled by policy stimuli is expected to spark a further upward rally in the stock marketHowever, the degree and duration of this rebound will largely depend on the effectiveness and intensity of these policy adjustments, suggesting the need for continued monitoring of market trends.

Friday was particularly marked by a high opening and a sustained rise throughout the session, with a broad-based increase in stock prices creating an optimistic trading atmosphereThe overall market sentiment was amplified, culminating in the previously mentioned gains across major indices.

Analyzing sector performances reveals that out of the 31 primary sectors tracked, 23 saw gains while 8 experienced lossesNoteworthy performers included sectors like telecommunications, computers, construction, military-industrial, media, and electronicsConversely, utilities, banking, retail, and beauty care sectors lagged behind, recording declines.

The telecommunications sector exhibited a standout performance, leading with a remarkable gain of 3.23%. Within this sector, 90 stocks advanced, while 19 declined

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Specific highlights included Guangku Technology hitting the daily limit-up, while others like Taicheng Technology, Bochuang Technology, and Zhongji Xuchuang surged beyond 10%.

Similarly, the computer sector saw a robust increase, closing up 3.04% with 235 stocks rising against just 25 that fellAmongst the major gainers were Dingjie Software reaching its limit-up, and Zhuhai Zhongke Information climbing by 13.55%. Several other notable stocks in this sector also substantially increased in value.

On the conceptual stock front, AI-related stocks collectively gained traction, boosting interest within sectors associated with optical communication modules, the CPO concept, and MLOps, all experiencing gains exceeding 5%. Additionally, stocks linked to the ChatGPT narrative also rebounded, further enhancing investor confidence.

According to Xu Fengguang, a fund manager at Rongzhi Investment, the market's universal rally stemmed partially from the photovoltaic and renewable energy sectors, signaling a notable resurgence in retail investor enthusiasm

However, he cautioned that the market had seen fluctuations, reflecting a reality more complex than a steady upward trajectoryThe ability of the market to withstand pressure, even amidst mixed economic data and a recent cut in the Medium-term Lending Facility (MLF) interest rate, speaks volumes about current investor sentiment.

In contrast, XU believes that previous confidence issues had been concentrated around continuous currency depreciation and the outflow of foreign investmentA recent stabilization of the yuan exchange rate following five weeks of decline marked a significant turning point, facilitating a return of Northbound fund inflows and propelling the stock market higher.

Official Lei, Chief Strategist at Xing Shi Investment, noted that the continuous rebound in A-shares was fundamentally driven by rising policy expectationsHe observed that after adjustments in the previous year left some sectors undervalued, this created fertile ground for a rebound in the market

Even with disappointing macroeconomic figures released this week, the overall market had already priced in these figures, mitigating any potential negative impact.

Looking forward, Furong Fund expressed that the variance in market expectations had begun to stabilize, with many participants shifting away from an over-emphasis on macroeconomic readingsThey acknowledged that the pessimism surrounding "bad economic data combined with short-term policy inflexibility" had shown signs of correctionWhile predicting market cycles remains uncertain, it is believed that any clear change in policy could lead to a significant upward market trend.

Investment Director Zhao Yuanyuan from Jianhong Investment cautioned that the weaker economic data witnessed in May and June was sparking speculation on potential stimulus measures, with monetary policy already showing signs of proactive adjustment, including a recent interest rate cut

Zhao anticipates more expansive monetary and fiscal measures will be introduced in July, particularly aimed at stabilizing and stimulating the economy, creating an environment conducive to sustained market momentum in the upcoming weeks.

Fang Lei, investment analyst, views the current market dynamics as a tactical space in which policy expectations will play a critical roleHe explained that due to limited incremental capital, recognizing structural opportunities has become paramountHe believes that proactive growth stabilization policies could positively influence economic forecasts and domestic demand, leading to enhanced profitability for companies deeply connected to the domestic marketRecent trends indicate a shift in market performance towards sectors closely aligned with domestic consumer demand.

Looking for structured investment opportunities, summer light brings optimism; investors may capitalize on the easing of monetary conditions and the potential for policy improvement

Among the areas to focus on, Xu Fengguang suggested two prominent sectors: the technology industry epitomized by advancements in artificial intelligence, and economic recovery tracks related to infrastructure and financial services.

Furthermore, Furong Fund emphasized the technology sector's prominence as a central player in this rebound narrative, having stabilized aproximadamente two weeks ahead of the overall marketThey recommend closely monitoring growth pathways such as semiconductors, computing, health care, and photovoltaic sectors, which promise notable returns against the backdrop of ongoing structural adjustments.

In the wake of the market's uptrend observed since early June, Huang Yi from Hongfeng Asset Management highlighted a balanced rise across various indices, presenting tangible opportunities for both value and growth stocksSpecific sectors poised for growth include renewable energy vehicles and the photovoltaic industry, which is currently experiencing a resurgence at historically low valuations