Despite significant declines in other Asia-Pacific markets today, with the Nikkei 225 and South Korea's KOSPI falling over 5% at one point, the Shanghai Composite Index staged a recovery from its lows to close in positive territory, demonstrating notable resilience. The ChiNext Index underperformed. Total market turnover reached 1.9 trillion yuan, with more stocks advancing than declining overall. Analysis suggests this relative strength of the A-share market is not coincidental but is supported by three core factors. First, valuation advantages. Market analysts believe that compared to the highly valued Japanese, South Korean, and Indian markets, A-shares are currently in a bottoming phase where downside appears limited. Core indices like the CSI 300 have price-to-earnings ratios near historical lows (around 12-13x), creating a clear "valuation gap" compared to international peers. Second, A-shares present opportunities amidst geopolitical tensions. While high oil prices fuel global inflation, the overall impact on A-share corporate profits is considered manageable. Strong gains in sectors like solar and wind power effectively offset broader index declines. Furthermore, if geopolitical conflicts disrupt global supply chains (e.g., shipping, aluminum production), it could highlight the stability of China's manufacturing supply chain, potentially benefiting export-substitute industries like chemicals and machinery. Third, China's "safe haven" attributes are becoming more prominent. Among capital flows in the Asia-Pacific and emerging markets, China (A-shares + Hong Kong stocks) has seen significant net inflows, surpassing India and some developed markets, underscoring its perceived stability during geopolitical unrest. Recent reports indicate global capital, including from the Middle East, is diversifying allocations towards China, viewing it as a core hub connecting to growth areas like technology, consumption, and the new economy.
On the market, high-speed rail concepts surged in the afternoon session, with China High-Speed Railway Technology hitting the daily limit up. According to reports, a flagship project of the "15th Five-Year Plan" major engineering initiative—the Yangtze River High-Speed Rail—is accelerating construction. This rail line will stretch approximately 2,000 kilometers from Shanghai to Chengdu, linking three major city clusters. With total investment exceeding 500 billion yuan, estimates suggest it could drive nearly 1.5 trillion yuan in value-added growth for upstream and downstream industries. In other sectors, pharmaceuticals remained active; Menova Pharmaceutical recorded its sixth limit-up in seven sessions, while Tianjin Pharmaceutical and Lianhuan Pharmaceutical both secured two consecutive limit-ups. The commercial aerospace concept recovered from early losses; Shenjian Stock achieved three straight limit-ups, Zaisheng Technology saw its third limit-up in four days, and Guanglian Aviation, Aerospace Power, and Zhongheng Design all hit the limit-up. Aluminum-related stocks strengthened throughout the day, with Minfa Aluminum, Changzhou Aluminum, Tianshan Aluminum, and Aluminum Corporation of China all rising by the 10% limit. Optical fiber concepts also gained steadily; Changfei Optical Fiber hit its third limit-up in five days, reaching a new historical high, while Hangzhou Cable recorded its third limit-up in four days, and Far East Cable secured two consecutive limit-ups. On the downside, power stocks declined sharply; Huadian Energy, Jinneng Power, and Yunan Energy Control all fell by the 10% limit. Looking at individual stocks, 2,868 companies advanced, 2,464 declined, and 162 closed unchanged. Seventy-seven stocks hit the upper limit, while 20 fell by the 10% limit. At the close, the Shanghai Composite Index rose 0.24% to 3,923.29 points, with a turnover of 839.8 billion yuan. The Shenzhen Component Index fell 0.25% to 13,726.29 points, with a turnover of 1.0761 trillion yuan. The ChiNext Index declined 0.68% to 3,273.36 points.
Fund flows showed major capital inflows into communication equipment, glass, and military electronics sectors. Stocks with significant net inflows included Pingtan Development, Hengtong Optic-Electric, and Aerospace Power.
Key news recap: 1. The State Administration for Market Regulation issued a notice on further implementing the Anti-Unfair Competition Law, emphasizing comprehensive measures to prevent "internal competition" in key sectors like platform economy, solar PV, lithium batteries, and new energy vehicles. The notice targets practices such as unjustified use of search rankings, algorithmic control, traffic restrictions, delisting products, fee increases, payment delays, transaction halts, and internal penalties by platform companies, as well as forcing merchants to sell below cost during promotions, which disrupt market order. 2. Former US President Donald Trump stated that Iran has agreed to "most of the content" in a proposed 15-point ceasefire plan. Trump mentioned that Iran would ship 20 cargoes of oil to the US as a gesture of goodwill, with loading starting soon. He also indicated consideration of seizing Iran's key oil export hub, Kharg Island, potentially involving a long-term US military presence. 3. Four government departments jointly issued the "Smart Shipping 2030 Action Plan," advocating for deepened smart port construction, enhanced monitoring of port infrastructure and vessel operations, and advancements in smart berthing, cargo handling, and pilotage technologies to improve efficiency and safety.
Outlook: 1. Huatai Securities: Against a backdrop of weak balance, seek certainty. Geopolitical tensions and global liquidity tightening expectations keep market sentiment cautious. Looking ahead, external geopolitical variables and pre-holiday effects may pressure trading activity. However, as April brings a dense earnings disclosure period for A-shares, market pricing may gradually shift from sentiment-driven noise back to fundamental verification. Allocations should moderately focus on sectors benefiting from high oil prices with pricing power, such as coal, power chains, and chemical raw materials, using low-positioned essential consumption as a defensive base. 2. China Securities: Monitor Middle East developments and focus on Chinese advantage assets. While US-Iran tensions have cooled slightly, recent US military deployments suggest potential escalation risks, warranting attention to market volatility over the next month. With A-shares having adjusted significantly, investors can await clear buying signals. Future focus should be on energy security, high-inflation beneficiaries, high-cash-flow products, oversold growth sectors, and low-valuation cyclical plays, including coal chemicals, new energy, energy storage, lithium battery materials, pesticides, fertilizers, coal, hydropower, AI computing, metals, innovative drugs, and consumption. 3. Shenwan Hongyuan: Revisiting the stability of China's capital markets. Short-term, global markets remain sensitive to US-Iran conflict catalysts; it's not yet time for heavy positioning. A-shares are still in a medium-to-long-term uptrend. While profit-taking effects face temporary disruptions, this likely only extends the consolidation phase after the "first leg up," with a "second leg up" remaining probable. During this interim period, opportunities lie in extensions of the tech theme and broadening macro narratives, particularly in previously strong areas like CPO, energy storage, and AI power. Next-phase leadership may emerge from new energy and new energy vehicle sectors, potentially aligning with macro trends for upward momentum and profit effect diffusion.
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