Highlights

The market is set to experience a stabilizing phase in June, with large-cap and quality stocks expected to outperform. Current economic fundamentals are relatively stable, with no significant downturn in exports despite changing external factors, and internal demand policies remain in a consolidation phase. The new regulations on quantitative trading to be implemented may affect market activity levels. Overall, the macro environment seems favorable for large-cap and quality stocks.

Sentiment Analysis

• The overall sentiment for June is mixed, reflecting both stability in fundamentals and potential turbulence from external factors.
• Implementation of new trading regulations may cause temporary disruption, yet the long-term view remains positive for certain sectors.
• A focus on cash flow and return on equity (ROE) strategy seems promising in the current landscape.
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Article Text

As we look forward to June, market dynamics suggest a potential period of consolidation where indices might stabilize before gaining further momentum. Large-cap indices and those emphasizing quality are likely to have a relative advantage during this time. The economic base remains stable, with no evident slumps in exports due to external changes. Internal demand policies are still gathering strength, potentially ready to introduce further measures if necessary.

The demand for corporate financing is tepid, with a declining trend in capital expenditures. This environment presents an opportunity for strategies emphasizing cash flow and profitability metrics like return on equity (ROE) to gain traction. As the market enters a stage where semi-annual reports come into focus, these factors are expected to significantly influence performance assessments.

New quantitative trading regulations set to be implemented on July 7 provide a narrowing window for adjustments in trading strategies. The regulatory climate might curb activity in micro-cap investments, shifting the focus to more stable large-cap stocks.

While international tariff negotiations intermittently disrupt the market, their impact on A-shares has been diminishing. The upcoming high-turnover phase for U.S. bonds in June might influence the dollar index and yield rates, factors that indirectly affect A-shares.

In summary, the wider index may experience oscillations in June. However, fundamental conditions, liquidity, and regulatory environments favor enhancing the performance of sizeable and quality-oriented stocks.

Key Insights Table

Aspect	Description
Market Stability	Expected index stabilization with quality and large-cap stocks leading.
Regulatory Changes	New trading regulations likely to moderate market activities.
Investment Strategy	Focus on strategies with strong cash flow and ROE.
External Factors	Ongoing tariff talks with diminishing impact on local markets.

Last edited at：2025/6/2