Market momentum eased today after yesterday's sharp decline. The three major A-share indices all closed in positive territory, while the Hong Kong market rebounded by 0.28%. However, the late-session trend was unfavorable, showing a pattern of opening higher and moving lower.
On March 4, the U.S. Senate voted on a bill aimed at restricting presidential war powers, which would have required congressional authorization before the President could take further military action against Iran. The bill failed to pass, with a vote of 47 in favor and 53 against. This outcome was anticipated given the Republican majority holding 53 of the 100 Senate seats. The failure to block the measure objectively means the Trump administration's military engagement is likely to continue.
The market's focus on Iran's leadership transition is largely settled. While there is no official confirmation, it is widely believed that Mojtaba Khamenei, the second son of Ayatollah Khamenei, has become the new Supreme Leader. This development is seen as a hardening of stance, suggesting the conflict could intensify. International oil prices continued to rise in early trading.
However, a sudden shift occurred in the afternoon. Amir Heydari, Deputy Commander of Iran's Khatam al-Anbiya Central Headquarters, stated in an interview on the morning of the 5th that Iran has not blockaded the Strait of Hormuz. The statement also clarified that military and commercial vessels belonging to the U.S., Israel, European nations, and their supporters are strictly prohibited from passing through the area and will be targeted if detected. Following this, Shanghai crude oil futures opened limit-up but then plunged over 8% intraday. U.S. and Brent crude also fell by over $1 per barrel. Shandong Molong (00568) fell over 15%, after having risen 9% earlier in the afternoon. Sinopec Oilfield Service (01033) dropped 10%.
Some interpreted this news as a sign of Iran seeking to de-escalate tensions. This is likely not the case, as the opening is selective, not universal. This move can be seen as Iran's attempt to avoid alienating Middle Eastern and European countries, recognizing the need for economic engagement and development. It cannot afford to severely damage other economies due to its conflict with the U.S. and Israel, especially as it relies on oil exports for revenue. Simultaneously, it serves as a deterrent to nations supporting the U.S. and Israel, forcing them to consider the consequences. It is a strategic maneuver. As for oil prices, they remain firm. The passage of numerous vessels requires lengthy screening, preventing swift and smooth transit. Significant price surges will depend on the duration and intensity of the conflict. PetroChina (00857), the most direct beneficiary, still closed higher. Gains in oil services and equipment stocks are driven by sentiment and should be approached with caution.
Today, the market focused on the Government Work Report delivered at the "Two Sessions." The most significant aspect was the setting of the mildest economic growth target in over thirty years, within a range of 4.5% to 5%. Shen Dan Yang, head of the State Council Research Office drafting group, emphasized that the range target allows flexibility to handle uncertainties, helps regions set local targets based on conditions, and guides efforts toward high-quality development. It was noted that full-year growth targets were also set as a range in two previous years: 2016 (6.5%-7%) and 2019 (6%-6.5%). Chen Changsheng, Deputy Director of the State Council Research Office, stated at a press briefing on March 5 that continued, more proactive and effective macro-policies would be characterized by significant scale, greater precision, and policy innovation. He expressed confidence that these forceful and targeted policies would maintain positive economic momentum and ensure a good start to the "16th Five-Year Plan" period.
The Government Work Report proposed establishing mechanisms to boost investment in and share risks for future industries, fostering sectors like brain-computer interfaces. Progress in brain-computer interfaces has accelerated since 2026. According to Precedence Research, the global market size was approximately $2.62 billion in 2024, expected to reach $2.94 billion in 2025, and grow to $12.4 billion by 2034, representing a CAGR of 17.35% over the decade. Nanjing Panda Electronics (00553) rose over 10%.
NPC deputy Lei Jun suggested improving collaborative governance to build a traffic safety system for the era of intelligent driving. His proposals included incorporating penalties for "hands-off, eyes-off" L2 assisted driving violations and swiftly clarifying safety standards for L3/L4 autonomous driving. NPC deputy He Xiao Peng proposed that a fully self-developed physical AI system enables technology reuse. He recommended increasing support for on-device large models and building an industrial technology foundation. On global competition, he suggested converting China's integrated vehicle-road-cloud development practices into international standards, promoting the "China solution" worldwide. Zhejiang Shibao (01057) gained 7.96%.
On March 4, seven tech giants—Amazon, Google, Meta, Microsoft, xAI, Oracle, and OpenAI—gathered at the White House to formally sign the "Ratepayer Protection Pledge" announced in the State of the Union address. This signifies that AI's electricity consumption issue has escalated from an industry-specific technical concern to a national policy agenda. Sector leader Dongfang Electric (01072) surged over 17% again, Shanghai Electric (02727) rose over 15%, and Harbin Electric (01133) advanced nearly 10%.
The coal sector also performed well. Power Glory Development (01277) recently issued a voluntary announcement stating that the mine construction for its South African Makhado coking coal project is in its final stages, with trial operations expected to commence in April 2026. The stock rose over 8% today.
Nvidia announced multi-year strategic collaborations with two leaders in optical communications, Lumentum and Coherent, investing $2 billion in each company, totaling $4 billion to advance optical technology R&D and manufacturing. Cambridge Technology (06166) rose nearly 8%, while HuiJu Tech (01729) and previously mentioned ASMPT (00522) both gained over 3%.
The pharmaceutical sector was catalyzed by a major business development deal. On March 4, Sino Biopharmaceutical (01177) announced pre-market that it reached an exclusive global licensing agreement with Sanofi for rovatcitinib, a first-in-class JAK/ROCK dual inhibitor. Sino Biopharmaceutical is eligible for up to $1.53 billion, including a $135 million upfront payment and potential development, regulatory, and sales milestone payments, plus tiered royalties up to the low double-digits on annual net sales. The stock rose over 3% today. Innovative drug-related stocks like Akeso (09926) and RemeGen (09995) climbed over 7%. Furthermore, according to drug intelligence data on patent expirations, hundreds of drug compound patents are set to expire in the next three years, including over 40 drugs with annual sales exceeding $10 billion. Next-generation metabolic and cardiovascular star drugs such as GLP-1 receptor agonists, SGLT2 inhibitors, and PCSK9 inhibitors will face patent cliffs in the coming three years, potentially driving a new wave of generic competition for chronic disease medications. Related first-to-market GLP-1 generics include: Federal Pharma (03933). Companies with dual SGLT-2/GLP-1 focus include: Sino Biopharmaceutical (01177), CSPC PHARMA (01093). Companies covering cardiovascular and metabolic areas comprehensively include: FOSUN PHARMA (02196).
The Fourth Session of the 14th National People's Congress will hold a press conference at 3:00 PM on Friday, March 6, 2026, at the Media Center press hall. Officials including the heads of the National Development and Reform Commission, the Ministry of Finance, the Ministry of Commerce, the People's Bank of China, and the China Securities Regulatory Commission will answer questions from domestic and foreign journalists on related topics. The market will watch for any new stimulus messages tomorrow. Today, Nanhua Futures (02691) saw preemptive warming. As mentioned previously, the company holds scarce licenses: it has the most comprehensive overseas clearing qualifications among Chinese entities, possesses strong pricing power, and boasts gross margins over 70%. It holds memberships in 17 exchanges and 14 clearing seats (e.g., CME, LME, SGX, ICE). Its business covers commodities (gold/copper/oil/agriculture), stock indices, interest rates, foreign exchange, power, and crypto derivatives. Client margin deposits (approx. HKD 10+ billion) are held in overseas banks, earning high interest (5%+) on USD/HKD with minimal cost. It earns management fees plus performance fees, with AUM exceeding HKD 1.5 billion and growth over 30%. The stock surged over 8% today.
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