A-share Digital Currency Stocks Surge 10% on Hong Kong Policy

On June 27th, A-share concept stocks related to digital currency continued their upward trajectory, with Hengbao shares hitting the daily limit up. This surge in digital currency concept stocks comes amidst a broader market trend where certain sectors, such as military and banking stocks, also saw significant gains.

Military stocks, in particular, experienced a notable rally, with several companies reaching their daily limit up. This trend is attributed to the gradual exhaustion of bearish factors in mainstream military sectors and the anticipation of increased domestic and international demand for military technologies.

Banking stocks also defied the overall market trend, with several major banks hitting new all-time highs. This strength in the banking sector is supported by the increasing allocation of equity assets by insurance funds and the high-quality development of public funds, which are expected to bring long-term incremental allocation effects to banks and solidify the lower limit of sector valuations in the short term.

The digital currency concept stocks, including Beijing Kingsoft Cloud Technology and Century Safety, remained active, with several stocks hitting their daily limit up. This activity is likely driven by the recent release of the "Hong Kong Digital Asset Development Policy Declaration 2.0," which outlines the region's vision for digital asset development and showcases practical applications of tokenization. However, it is important to note that the stablecoin concept has seen intensified divergence after repeated speculation, leading to short-term profit-taking pressure and a potential for continued divergence and consolidation in the near future.

The overall market outlook remains cautiously optimistic, with the three major indices closing lower after an initial jump. The market is expected to consolidate in the short term, with the 5-day moving average serving as near-term support. As mid-year earnings forecasts are gradually disclosed, relatively low-position outperforming sectors may also become key focuses for investors. The market's focus is shifting towards dip-buying opportunities, particularly in sectors that have seen significant gains and may be due for a correction.