Driven by renewed conflict in the Middle East, A-shares opened lower overall today. However, large-cap blue-chip stocks demonstrated notable resilience, with the Shanghai Composite Index, the SSE 50, and the CSI 300 all managing to turn positive. In contrast, the BSE 50 index fell sharply by 3.99%, while the STAR Composite Index and the ChiNext Index also recorded declines. Over 4,300 stocks fell, yet trading volume surged again, exceeding 3 trillion yuan to hit a new periodic high.
On the market, sectors such as oil, precious metals, nonferrous metals, and defense & military led the gains. Conversely, artificial intelligence, medical aesthetics, digital currency, and gambling concepts were among the biggest decliners.
Wind real-time data indicated significant net inflows of main funds: the petroleum & petrochemical sector saw over 13.6 billion yuan, communications attracted over 10.3 billion yuan, defense & military received over 6.1 billion yuan, and power equipment garnered over 5.1 billion yuan. Machinery, banking, and other sectors also experienced net inflows exceeding 2 billion yuan each, while the environmental protection sector recorded net inflows for the 16th consecutive trading day. In contrast, the computer sector suffered a net outflow of over 8.3 billion yuan, electronics saw outflows of over 6.1 billion yuan, and media experienced outflows of over 4.4 billion yuan.
Regarding individual stocks, BYD and Zhongji Xuchuang each attracted over 4 billion yuan in net main fund inflows. PetroChina and New Easun saw inflows exceeding 3 billion yuan, while China Satellite received over 2.1 billion yuan. Fourteen other stocks, including Sungrow Power and Cambridge Technology, each had net inflows of over 1 billion yuan.
Looking ahead, Guotai Haitong pointed out that stability is the current foundation of the Chinese stock market. While the impact of geopolitical conflicts on major indices is limited, sector structure is crucial. Following a collective adjustment in the large financial sector, which acts as a key market weight and stabilizer, it now presents allocation value. Recommendations include banking and non-bank financials. With changes in the global security landscape, competition for resources is creating a long-term "security premium," favoring nonferrous metals, oil shipping, and petrochemicals. For emerging technologies, the focus is on self-sufficiency and AI applications, recommending machinery, electronics, defense & military, power equipment, and the broader AI ecosystem.
Huatai Securities believes the "Spring Rally" is one of the more reliable calendar effects in the A-share market. High post-holiday trading volumes indicate a foundation of ample liquidity remains. However, visibility for a further breakthrough in risk appetite has diminished, suggesting the upward trajectory of major indices may slow compared to previous years, increasing the necessity to seek structural opportunities. A style shift from small-cap to large-cap stocks still requires a turning point in excess liquidity, an earnings recovery trend in large-cap value stocks, and supportive capital flows, with a potential observation window in March-April.
In market highlights, precious metal concept stocks opened higher against the market trend in the morning and strengthened further in the afternoon. The sector index surged over 10%, with trading volume more than doubling from the previous session. Xiaocheng Technology hit the 20% limit-up near the close, while Hunan Silver reached limit-up during the final call auction. Stocks like Xiaocheng Technology, Western Gold, and Sichuan Gold saw strong limit-up gains in the afternoon.
A surprise attack by the US and Israel on Iran sharply heightened market risk aversion. The spot price of gold in London opened significantly higher and continued to rise, gaining 2.5% at the time of writing to break above $5,400 per ounce, approaching its historical peak. The main domestic gold futures contract also opened high and rose sharply, climbing 4.56% to approach its historical high of 1,200 yuan.
Bolstered by the strength in precious metals, the nonferrous metals sector also launched a high-volume offensive in the afternoon. Industrial metals led the charge, with the sector index turning from a slight loss at the midday close to a surge of over 3% on heavy afternoon volume. Haixing Co. hit limit-up instantly after the afternoon session opened, with Xingye Silver & Tin and Zhuye Group among the top gainers.
Sub-sectors such as rare metals, nickel metals, and scarce resources within the nonferrous complex collectively strengthened in the afternoon. China Rare Earth Nonferrous Metals Co., Ltd. (600259) surged to the limit-up with just 15 minutes left in trading. Stocks like Yunnan Tin, China Ruilin, and Xianglu Tungsten also posted strong limit-up gains in the afternoon.
Dongxing Securities stated that with significant volatility amplification in global financial markets, coupled with fragile supply in the metals industry under a weak Juglar cycle and rising metal demand driven by computing infrastructure and new energy development, metal prices may continue their upward trend beyond expectations.
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