Persistent tensions in the Middle East have investors grappling with inflationary pressures from elevated oil prices, while shifting their focus to the upcoming Federal Reserve interest rate decision. However, modest overnight gains in the three major U.S. stock indices left A-share investors somewhat disconcerted. Specifically, rising crude prices during Asian trading hours pressured the market, but positive news from the U.S. later helped curb oil prices and boost European and U.S. equities. This left Chinese markets feeling the sting of yesterday's declines. Today, A-shares saw wide fluctuations, with the ChiNext Index showing stronger performance. At the time of writing, the Shanghai Composite Index was up 0.02%, the Shenzhen Component Index rose 0.35%, and the ChiNext Index advanced 0.8%. Notably, despite extensive commentary from Donald Trump, oil prices recovered from intraday lows by the close. The simultaneous rise in U.S. stocks and oil prices is viewed by market participants as one of the most unusual price signals to date. Fawad Razaqzada of Forex.com noted that markets are increasingly showing a tendency to disregard current tensions, though they remain cautious. Prolonged conflict risks exerting further pressure on equities.
In market movements, the computing-power synergy concept was active early in the session, with Shaoneng Energy and Guangdong Electric Power sealing limit-up gains at the open. The memory chip sector also performed strongly, with Biwin Storage rising over 5% to set a new historical high, and Netac Technology climbing more than 8%. The green power concept saw repeated activity, with Huadian Liaoneng Energy notching a third consecutive limit-up, while Guangdong Electric Power and Shaoneng Energy also hit the upside limit. Oil and gas stocks experienced a significant pullback, with Intercontinental Oil & Gas briefly touching the跌停板 limit, and Shandong Molong approaching跌停板.
Looking ahead, Debon Securities believes the A-share market may continue to exhibit structural characteristics, with rotation between tech growth and traditional cyclical sectors likely to dominate. GF Securities suggests that after short-term geopolitical uncertainties subside, Chinese equities could present the year's best buying opportunity.
**Hot Sectors** 1. **Computing-Power Synergy Concept Active** The computing-power synergy concept was active at the open, with Shaoneng Energy and Guangdong Electric Power hitting limit-up. Anker Power, Jinko Power, and GCL Energy followed with gains. On the news front, Shaoneng Energy announced that its wholly-owned subsidiary plans to invest 1 billion yuan to establish a new subsidiary in Lechang, Shaoguan, to develop clean energy operations. Additionally, Guangdong Electric Power indicated on its interactive platform that its Karamay photovoltaic project in Xinjiang plans to support the construction of a computing center with a capacity of 500 PFlops.
2. **Memory Chip Stocks Strengthen** Memory chip concepts were active, with Biwin Storage rising over 5% to a fresh record high, and Netac Technology gaining more than 8%. Longsys, Ingenic Semiconductor, Hensoldt, Shannon Semiconductor, and GigaDevice also advanced. On the news front, U.S. memory chip stocks generally rose, with Western Digital up over 9%, Seagate Technology gaining more than 5%, and Micron Technology climbing over 4% to a new all-time high. A union at Samsung Electronics in South Korea is set to vote on Wednesday on what could be the largest strike in the company's history; if approved, chip production may halt in May.
**Institutional Views** **GF Securities: Chinese Equities May Offer Buying Opportunity After Geopolitical Uncertainties Subside** Following the U.S.-Iran conflict, shifts in logic and subsequent developments suggest that in the short term, geopolitical unpredictability dominates. Over the medium term, the impact may be gradually absorbed, and the tech industry cycle is not easily capped. With the 2026 U.S. midterm elections likely to center on "prices," prolonged conflict may be untenable ahead of the elections. The logic supporting a bull market in non-U.S. assets in 2026 is unlikely to be overturned by geopolitical tensions. Therefore, after short-term uncertainties ease, Chinese equities may present this year's best buying opportunity.
**Debon Securities: A-Shares May Continue Structural Market Characteristics** Debon Securities believes the A-share market may maintain structural characteristics, with rotation between tech growth and traditional cyclicals likely to be the main theme. From a macroeconomic perspective, China is in a critical period of transformation and upgrading, with technological innovation and industrial upgrading as key development directions. As the end of March approaches, listed companies will enter a dense period of annual report disclosures, where earnings will be a critical factor influencing individual stock performance. Companies with better-than-expected results and confirmed growth potential may gain market favor, while those with disappointing earnings or deteriorating fundamentals could face adjustment pressure. Policy developments, including industrial policy adjustments and fiscal or monetary moves, also warrant close attention.
**CSC Financial: Chemical Price Hikes Spread, Price Difference Index Surges** Driven by post-holiday production resumptions and rising oil prices, the diffusion index (proportion of chemical products with week-on-week price increases) among 154 chemical products reached 64.94%, up 4.55% from the previous week, indicating a spread of price hikes. Unlike last week's narrowing price difference index, this week's chemical product price difference index surged to 13.65% of the past decade's range, up 9.39% week-on-week, as rising oil prices began to transmit to midstream products. The view remains optimistic that rising oil prices at the cycle's bottom will drive inventory reduction through price increases, potentially initiating a new inventory cycle.
Comments