Major indices in Shanghai and Shenzhen rebounded strongly today. The Shanghai Composite Index climbed over 2%, the Shenzhen Component Index advanced more than 4%, and the ChiNext Index surged close to 6%. Trading volume on the two exchanges expanded significantly to 2.45 trillion yuan.
Less than ninety minutes before a deadline set by former President Trump, the US and Iran unexpectedly announced a ceasefire, concluding a period of intense pressure. The resumption of negotiations is the result of multiple pressures rather than a capitulation by either side. The US seeks a dignified exit, while Iran aims for a politically declared victory. However, Iran's ten-point plan, demanding a full US troop withdrawal, the lifting of all sanctions, and reparations, presents extremely tough conditions for the US. Reaching an agreement will likely require compromises from both parties, with Israel remaining a significant variable. Given this backdrop, short-term market uncertainty persists. A defensive yet opportunistic strategy may be suitable for the second quarter, focusing on genuine corporate profit recovery and allocations combining dividend-low volatility stocks with those offering certain growth prospects. From a medium to long-term perspective, geopolitical conflicts could accelerate global capital allocation towards safe-haven assets. China's relatively stable environment and gradually improving economic fundamentals may attract cross-border capital inflows.
On the news front, on the evening of April 7th local time, former US President Trump stated on social media that, following a conversation with Pakistani officials, he agreed to suspend bombing and attacks on Iran for two weeks. This is contingent on Iran agreeing to "fully, immediately, and safely" open the Strait of Hormuz, constituting a "two-way ceasefire." Iran's Supreme National Security Council subsequently issued a statement formally accepting the ceasefire proposal from Pakistan. US-Iran negotiations are scheduled to begin on April 10th in Islamabad, Pakistan, lasting for two weeks. Brief Comment: The agreement by the US, Israel, and Iran to a temporary two-week ceasefire marks a significant turning point after nearly two months of Middle East conflict. The anticipated reopening of the Strait of Hormuz, a chokepoint for roughly 20% of global oil shipments, could lead to a rapid unwinding of the accumulated geopolitical risk premium. Key points of divergence remain, however, as the core demands of Iran's ten-point plan conflict with US bottom lines. The direction of negotiations after the two-week period is a critical variable. Iran has explicitly stated it is "prepared to fight if talks fail," indicating short-term geopolitical risk premiums have not fully dissipated.
On April 7th, China's State Administration of Foreign Exchange released the latest reserve asset data. As of the end of March, China's official gold reserves stood at 74.38 million ounces, an increase of 160,000 ounces from the 74.22 million ounces held at the end of February. This marks the 17th consecutive month of gold accumulation. Over the same period, China's foreign exchange reserves totaled $3,342.1 billion, a decrease of $85.7 billion from the end of February, primarily influenced by a 2.4% monthly increase in the US dollar index and a 33-basis-point rise in the 10-year US Treasury yield. Brief Comment: The central bank's 17 consecutive months of gold accumulation signals a long-term strategic move towards diversifying reserve assets. The March increase of 160,000 ounces was the largest in 13 months, indicating that amid heightened geopolitical conflict and rising global asset volatility, the central bank is accelerating gold allocation to enhance national financial security. While gold prices experienced a short-term correction in March due to liquidity squeezes, the global trend of de-dollarization and US fiscal unsustainability remain core long-term drivers supporting gold's value.
Also on April 7th, the National Development and Reform Commission announced adjustments to domestic fuel prices effective from midnight. The stated increases for gasoline and diesel were 800 yuan and 770 yuan per ton respectively, but the actual implemented increases were 420 yuan and 400 yuan per ton after regulatory intervention. This resulted in savings of 0.31 yuan per liter for 92-octane gasoline and 0.32 yuan per liter for 0-grade diesel. Brief Comment: This fuel price intervention represents another "peak-shaving" measure following the March 23rd adjustment, demonstrating the continuity and flexibility of policy tools in managing imported inflation pressures. The escalation of US-Iran conflict since March drove a sharp rise in international oil prices; this intervention directly alleviates cost pressures for downstream oil consumers and helps stabilize profit expectations for related sectors such as aviation, shipping, chemicals, and automobiles. Attention turns to the next pricing window on April 21st and the trajectory of international crude prices.
In market performance, A-share indices rose on April 8th. At the close, the Shanghai Composite Index stood at 3995.00 points, up 2.69%. The Shenzhen Component Index reached 14042.50 points, gaining 4.79%. The ChiNext Index closed at 3347.61 points, surging 5.91%, while the STAR 100 Index rose 5.96% to 1577.26 points. Among primary sectors, Communications, Electronics, and Media led gains, advancing 6.96%, 6.60%, and 6.52% respectively. Only Oil & Petrochemicals and Coal declined, falling 2.64% and 1.56%. Advancing issues outnumbered decliners significantly.
Total market turnover reached 2450.999 billion yuan, increasing from the previous session. The margin trading and securities lending balance also rose compared to the prior day.
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