Amid a broad market downturn influenced by declines in overseas markets, A-shares followed suit with adjustments. The Shanghai Composite Index narrowly held above the 4,000-point mark, while the Beijing Stock Exchange 50 Index fell more than 3%, hitting its lowest level in nearly 11 months. The Shenzhen Component Index and the STAR Composite Index both dropped over 2%. More than 5,000 individual stocks declined, with trading volume slightly increasing to 2.13 trillion yuan.
Sectors such as oil and gas extraction, coal, diversified finance, and utilities showed resilience against the broader market trend. In contrast, non-ferrous metals, chemicals, glass and fiberglass, and animal health were among the worst performers.
According to Wind real-time data, the utilities sector saw net inflows of over 6.3 billion yuan in main funds, while the computer and communications sectors attracted net inflows of 4.8 billion yuan and 3.9 billion yuan, respectively. The petroleum and petrochemicals, and media sectors each recorded net inflows exceeding 1 billion yuan. On the other hand, electronics experienced net outflows of over 17.4 billion yuan, basic chemicals saw outflows of more than 9.3 billion yuan, and defense and military industries recorded outflows exceeding 3.1 billion yuan. Non-ferrous metals, machinery, and power equipment sectors also registered net outflows of over 2 billion yuan each.
In terms of individual stocks, Jiuan Medical received net inflows of over 2.3 billion yuan in main funds, while Cnpc Capital attracted more than 2 billion yuan. Seven other stocks, including Jinkai New Energy, Kunlun Tech, Tongniu Information, and Lianhua Holdings, also saw net inflows exceeding 1 billion yuan.
The oil and gas extraction sector remained strong throughout the trading session, with a noticeable surge in volume and buying interest towards the close, driving the sector index up by more than 5%. All stocks in the sector advanced, with Blue Flame Holdings hitting the limit-up in a straight-line surge during the afternoon session. Stocks such as Shouhua Gas, Intercontinental Oil and Gas, PetroChina, and CNOOC also saw significant volume-driven gains near the closing bell.
Escalating tensions in the Middle East have triggered another sharp rise in global oil and gas prices. Brent crude prices, after surging over 5% yesterday, rose an additional 6% by the time of writing. The ICE UK NBP natural gas price opened sharply higher in the afternoon session, gapping up more than 27% to reach its highest level in nearly three years.
Domestically, the main crude oil futures contract surged over 8.48%, setting a new record high. The liquefied petroleum gas futures contract hit the limit-up, reaching its highest level in nearly four years, while the low-sulfur oil futures contract rose over 10%, also hitting a record high. Futures contracts for fuel oil and asphalt opened significantly higher and continued to climb, reaching multi-year highs.
Goldman Sachs noted that if shipping volumes remain low before March 20, oil prices could continue to rise during this period "until the market is convinced that long-term disruptions are unlikely." Should crude oil shipments through the Strait of Hormuz remain low throughout March, oil prices could surpass their 2008 peak.
Stocks in the diversified financial sector also exhibited unusual activity during the afternoon session. The sector index, which had been down nearly 1%, surged over 2% in just over ten minutes. Cnpc Capital experienced a vertical limit-up in the afternoon, while China Oil and Foodstuffs Capital and Ruida Futures also saw volume-driven gains around the same time.
Looking ahead, Hualong Securities pointed out that geopolitical conflicts are unsettling the market, but a period of allocation opportunities may emerge once tensions ease. Historical data suggests that the impact of such conflicts is typically short-term, often creating bottom-fishing opportunities afterward. In terms of sector and thematic allocation, growth-oriented areas such as technology and advanced manufacturing warrant attention, particularly in power equipment, defense and military industries, and automation equipment.
Debon Securities highlighted that the closure of the Strait of Hormuz following U.S.-Iran tensions has increased external uncertainties and raised risks of a global economic slowdown, dampening market sentiment. However, China's economy is at a critical stage of transformation and upgrading, with ongoing policy support providing fundamental backing for the market. The A-share market may continue to exhibit structural trends, with future performance closely tied to the annual results of listed companies.
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