Market sentiment remained weak as significant news triggered sharp declines in SUPER MICRO COMPUTER INC and Sharetronic Data Technology Co.,Ltd. shares. Are you managing alright? Today's market closing session appeared highly unusual, with the three major A-share indices experiencing sustained and steady declines. Hong Kong stocks followed a similar pattern, continuing to fall after the A-share market closed. Let's examine what transpired.
During the final trading session, the Shanghai Composite Index broke below the 4,000-point level. On March 20, the three major A-share indices showed mixed performance. Despite positive news from Elon Musk that initially pushed the ChiNext Index up over 3%, the market began a continuous decline in the afternoon. At closing, the Shanghai Composite Index dropped 1.24%, the Shenzhen Component Index fell 0.25%, while the ChiNext Index managed a 1.3% gain.
Market data showed 662 rising stocks with 39 hitting daily limit-up, contrasted by 4,786 declining stocks including 23 that reached daily limit-down. Twenty-three stocks experienced failed breakout attempts, representing a 40% failure rate.
The solar and energy storage sectors demonstrated strength, with multiple stocks including Guosheng Technology and Yongzhen Shares hitting limit-up. Optical communication concept stocks rallied, with Yuanjie Technology surging over 17% to become the second-highest valued A-share stock, surpassing Cambricon. The lithium battery sector rebounded, with Shida Shenghua reaching limit-up.
Market developments included significant positive news from Elon Musk, indicating that Tesla is negotiating with Chinese suppliers to purchase equipment valued at $2.9 billion (approximately 20 billion yuan at current exchange rates) for manufacturing solar panels and batteries. Tesla's CEO aims to increase solar installation capacity in the United States by 100 gigawatts. According to three informed sources, Chinese companies have been instructed to deliver equipment by this fall, with two sources indicating the equipment will be shipped to Texas. Musk's planned solar power generation capacity will primarily serve Tesla, with a portion allocated to power SpaceX satellites.
On the declining side, computing power rental concept stocks retreated sharply, with Litong Electronics and Chaoxun Communication hitting limit-down. The chemical sector underwent adjustments, with stocks including Kingenta and Xinghua Chemical reaching limit-down.
Why did the three major indices plunge during the final session? Market analysts suggest investors may be avoiding potential geopolitical risks over the weekend.
Another significant negative development triggered immediate sharp declines. On March 20, market attention focused on Sharetronic Data Technology Co.,Ltd.'s sudden limit-down drop. This movement related to overseas market developments where the U.S. Department of Justice charged a co-founder of SUPER MICRO COMPUTER INC with allegedly illegally transporting servers containing NVIDIA chips worth billions of dollars abroad. SUPER MICRO COMPUTER INC serves as a crucial assembler of AI servers equipped with NVIDIA's advanced components, competing with companies like Foxconn. Data indicates the company accounts for approximately 9% of NVIDIA's revenue.
Following this news, SUPER MICRO COMPUTER INC's stock plummeted approximately 20% in after-hours trading. Sharetronic Data Technology Co.,Ltd., which heavily relies on overseas high-end GPU/server procurement, faced market concerns about potential significant increases in difficulty and cost of obtaining computing hardware, triggering panic selling.
In response, Sharetronic Data Technology Co.,Ltd. stated that the company consistently adheres to compliant operations, with all intelligent computing products procured through legitimate commercial channels, always strictly following market rules and legal regulations in business conduct.
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