The Chinese economy has staged a V-shape rebound, backed by better-than-expected performance in industrial production and the great resilience in exports, said Hu Yifan, regional chief investment officer and chief China economist with UBS Global Wealth Management.

Policy supports, especially infrastructure investment driven by government bond issuance, are expected to help sustain the recovery over the second half of the year, when economic growth may recover to about 5-6 percent year-on-year, Hu said.

Home prices recorded in June were on a rise in 61 of the 70 major cities tracked by the National Bureau of Statistics, four more than that of May. The steadily resumed businesses helped sustain demand for home purchases in June while government efforts helped maintain market order, said Kong Peng, chief statistician of the NBS.

As a result, capital started to pour into undervalued A-share stocks of property companies, a traditional cyclical sector. Other cyclical sectors like coal, securities firms, insurance and banks have all benefitted, said Li Qilin, chief economist at the Guangdong-based Yuekai Securities.

"The loosened credit environment, better-than-expected property sales and improving PMI(purchasing managers index) numbers have contributed to a positive outlook for the economic recovery in China. Given the improving economic data, investors will be more risk-taking," he said.

Yang Delong, executive general manager of Shenzhen-based First Seafront Fund, explained that companies specializing in 5G technologies, new energy vehicles, semiconductor chips and consumer electronics had already seen their prices surge in the first six months of the year. Regarding the second half, consumer goods providers securities and technology companies will have more room for growth, he said.

But Yang stressed that a bull market does not necessarily guarantee price rise of all stocks. Companies with strong financial results will certainly see their prices rise, but those with lousy performance or taking advantage of market speculation will be hardly pursued, said Yang.

"A bull market in the future will no longer benefit all A-share companies regardless of their performance. We will see utterly opposite stories. Companies with strong performance will be increasingly favored by investors, a trend that will be increasingly noticeable," he said.

Looking ahead, a healthier capital market where direct financing will play an increasingly bigger role, will facilitate the development of industries related to economic restructuring, like "new infrastructure", which is best represented by 5G and telecommunications.

Technology-heavy sectors showing more noticeable trends of progress, such as consumer electronics and new energy vehicles, will also benefit, according to Founder Securities.

Wang Jian, chief analyst for the non-banking financial sector at Guosen Securities, explained that the development of direct financing is the underlying reason for the recent bull run.