On June 19, the Chinese A-share market faced a turbulent adjustment, with indices such as the Shenzhen Component Index and the ChiNext Index plunging by over 1%. The trading volume continued to dwindle to around 708.8 billion yuan, reflecting a persistent downturn that has characterized the market since late MayThis downward trajectory has left investors and analysts speculating about the future course of the market.

After hitting a low in early February and experiencing a temporary rebound, A-shares have seen a steady decline, raising significant questions about the market's next movesVarious analysts share a consensus that the A-share market is currently in a phase of oscillation while attempting to establish a solid baseThe prevailing problem appears to be the lack of incremental capital, leading to subdued market sentiment and stymying any significant upward momentumAnalysts recommend that investors focus on balanced asset allocation, reduce trading frequency, and exercise caution in managing their portfolios.

The market's difficult climb is underscored by the figures showing nearly a 5% decrease in A-share prices since May 21. On the day of reporting, the Shanghai Composite Index slightly fell by 0.4% to close at 3018.05 points, while the ChiNext Index dropped by 1.26% to 1788.5 points, and the STAR 50 Index slipped by 0.69%. Such declines indicate growing concerns regarding the market's vitality as trading volumes continue to shrink.

Among various sectors, the majority showed declines

Out of the 31 major sectors tracked, only a few, such as banking, oil, and non-ferrous metals, managed to stay slightly positiveConversely, sectors like defense, retail, and automotive saw declines exceeding 1%, with the power equipment sector leading the losses with a 2% dropThis trend signifies a widening gap between resilient sectors and those under strain.

Concurrently, in the STAR Market, the majority of constituent stocks also fell, with companies like Daqo New Energy and Zhongke Chuangda experiencing declines of more than 6%. As of June 19, the STAR 50 Index has recorded an approximate 12% decline over the yearSuch significant setbacks signal ongoing volatility amidst a broader market slump.

Key market observers emphasize that the core issue remains the lack of incremental funds coupled with waning market enthusiasm, which collectively hampers any chance of a significant rally

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Liu Hong, a manager at Tongwei Investment, noted the minimal chances of an outright downward trend, especially following the liquidity panic observed in February and the supportive policies introduced in AprilAmidst this challenging climate, with domestic demand sluggish and external macro uncertainties lingering, investors are encouraged to pursue balanced portfolio strategies and controls over their stock positions.

The decline in major indices, notably affected by the slump in leading stocks like Kweichow Moutai, has starkly illustrated the overall dip in consumption sentimentXia Fengguang, the fund manager at Rongzhi Investment, pointed out that after a subsequent adjustment of blue-chip stocks, the present slump may have concluded, as the trading volume seems to be stabilizing following a prolonged contractionTechnical analysis suggests a potential for identifying market bottoming out levels, advocating a focus on sectors showcasing self-innovation like semiconductors, alongside financial sectors like securities, and commodities such as precious metals and copper.

From the perspective of Hao Xinming, a fund manager at Fangxin Wealth Investment, the current period can still be classified as one of oscillation, with trading volumes having hit rock bottom

This situation could pave the way for a turning point, as the market reflects various fundamental and liquidity dimensionsBefore resolving the supply side and experiencing a resurgence in consumer demand, oscillations will likely continue as the market searches for a bottom and validates performance milestones.

Zheng Yanxin, the general manager of Guangdong Guoxin Industrial Research Institute, candidly remarked that it remains difficult to predict when the A-share market might reboundHowever, he suggested that the extreme bearishness has mostly been exhaustedThe 3000-point mark presents a formidable support level, and the current valuation appears relatively secure, although recognizing the inherent unpredictability of the market is essential.

In terms of sector performance, it is noteworthy that the banking and coal sectors have surpassed a 15% increase this yearOther sectors like home appliances, utilities, and oil also showcased solid performance

Conversely, sectors including computing, retail trade, media, pharmaceuticals, and light industry have all declined by more than 16% year-to-dateOver the past ten days, while most sectors suffered, the electronics, communications, and computing sectors demonstrated relatively better resilience.

Looking forward, Zheng Yanxin indicated that the recent speeches by CSRC officials at forums like the Lujiazui Conference highlight a clear policy direction both now and in the futureHe emphasized the risks associated with concentrating investments in a single sector but noted that actively seeking out high-performing stocks with sustainable growth prospects remains a viable strategyLong-term investment should rightfully focus on companies demonstrating sustainable development potential while adhering to proper diversification and prudent operational guidelines.

Furong Fund has also underscored the importance of technology as a focal point for medium to long-term investment

They believe the overall risks associated with market downturns may be limited, suggesting that investing patience is crucialContinued attention should be directed toward cyclical leaders who have already hit bottom while simultaneously looking at companies with tangible growth potential in the technology sectorThe trajectory of the tech industry will likely be influenced by industrial trends, policy shifts, and liquidity conditionsPresently, the sector is marked by significant industry expectations, particularly in areas like AI innovation, which creates a "buy the rumor" scenario amid notable volatility.

On offensive strategies, Liu Hong recommended maintaining focus on the supply chains of high-flying companies like Nvidia—spanning optics, server production, printed circuit boards (PCB), and high-speed copper connectionsAdditionally, stocks that are fundamentally sound and poised to benefit from the anticipated easing of monetary policy by the Federal Reserve are also highlighted for significant investment potential.