A-shares open higher and continue to rise: the three major indices all up more than 1%, power stocks lead a surge in limit-up hits, with over 4,800 stocks in the green.

Ask AI · How to balance overseas conflict and policy support behind the A-share surge?

Three major A-share market indices opened higher collectively on March 25. In early trading, they fluctuated and moved higher; the SSE Index regained the 3,900-point level. After midday, both markets maintained high-level consolidation, and the SZSE Component Index and the ChiNext Index once again rose by more than 2%.

Judging from the market action, stocks tied to the “computing and power coordination” concept surged. Power-related stocks hit a wave of daily limit-up moves. Themes such as computing hardware and cloud computing were active, with CPO and high-speed copper interconnects leading the gains. Defense industry and cross-strait integration concept stocks rose in the afternoon. The gold and duty-free store index saw gains near the top.

By the close, the Shanghai Composite rose 1.3% to 3,931.84 points; the STAR 50 Index rose 1.91% to 1,315.41 points; the Shenzhen Component Index rose 1.95% to 13,801 points; and the ChiNext Index rose 2.01% to 3,316.97 points.

Wind data shows that among all A shares and the Beijing Stock Exchange (including North Exchange) there were 4,871 stocks that rose, 559 stocks that fell, and 59 stocks that were flat.

Total trading value across the Shanghai and Shenzhen markets was 21,799 billion yuan, up 97.1 billion yuan from 20,828 billion yuan on the previous trading day. Of that, Shanghai’s trading value was 9,679 billion yuan, up 36.5 billion yuan from 9,314 billion yuan the day before; Shenzhen’s trading value was 12,120 billion yuan.

According to Great Wisdom VIP, among all A shares and the Beijing Stock Exchange (including North Exchange), 116 stocks had a gain of more than 9%, and 3 stocks had a decline of more than 9%.

Nonferrous metals led the gains, while oil and petrochemicals fell against the trend

In terms of sectors, driven by the rebound in international gold prices, nonferrous metals led the gain. Rongjie Co., Ltd. (002192) hit the daily limit; Yunnan Germanium Industry (002428) briefly hit the daily limit; and stocks such as ShengTUN Mining (600711), Chifeng Gold (600988), Oriental Tantalum (000962), Yongmaotai (605208) all rose more than 5%.

Communication stocks surged significantly. More than 10 stocks hit the daily limit or rose more than 10%, including Aled (301419), Guanghuan Interchange Network (300383), Changying Tong (688143), Tongding Interconnect (002491), Changjiang Communications (600345), Mingpu Optical Magnetics (002902), and 263 (002467).

Electronics stocks performed strongly. More than 10 stocks hit the daily limit or rose more than 10%, including Changguang Huaxin (688048), GEVERT (688141), Lite Optoelectronics (688150), Huaya Intelligent (003043), Runson Technology (603933), Chaoying Electronics (603175), OLYEDE (600666).

Coal stocks showed a clear downtrend. Stocks such as Lu’an Environmental Energy (601699), China Coal Energy (601898), and Yankuang Energy (600188) fell by more than 4%. Jinengc Coal Industry (601001), An Tai Group (600408), Shaanxi Coal Industry (601225), Shanxi Coking Coal (000983), and China Shenhua (601088) fell by more than 2%.

Oil and petrochemicals fell against the trend. Tongyuan Petroleum (300164) fell by more than 6%. Stocks such as InterContinental Oil & Gas (600759) and Blue Flame Control (000968) fell by more than 5%. Guanghui Energy (600256), China National Offshore Oil Corporation (600938), and Zhongman Petroleum (603619) all fell by more than 3%.

Shipping stocks declined. Stocks such as China Merchants Nanjing Oil (601975) and China Merchants Jinling Shipping (601872) fell by more than 3%, while stocks such as COSCO Shipping Energy (600026) and COSCO Shipping Holdings (601919) fell by more than 2%.

The foundation of this round of the A-share rally remains solid

CITIC Securities believes that the market’s core downside pressure comes from overseas. If the Middle East conflict further escalates, it could lead to sustained increases in oil prices and intensify global stagflation pressure. If U.S. inflation continues to run above expectations, the Federal Reserve may delay rate cuts or even resume rate hikes, which would suppress global liquidity and risk appetite. Given that China’s domestic macro policy direction is becoming clearer, it provides a solid bottom-line support for the market. The firm recommends closely monitoring macroeconomic data, overseas liquidity changes, and policy developments.

Caitall Securities says that in the short term, disturbances caused by the Middle East situation’s back-and-forth remain, but their impact may weaken on the margin. There are two main reasons: On the one hand, Iran and the U.S. may ease the situation through negotiations, and market panic sentiment could subside. On the other hand, after several recent trading days of large swings in global equity markets, the scenarios that are relatively bearish in the short to medium term have already been priced in more fully. As the market stabilizes later in the day, investors may participate appropriately in short-term index rebound opportunities. However, although the broader market rose broadly that day, it also saw relatively high contraction in trading volume, and since A shares are about to enter a period of dense earnings releases, investors’ risk appetite still needs improvement. Meanwhile, from A shares’ own technical perspective, because major indices are still in short-sell arranged downtrend, if they cannot stabilize and break through resistance levels with an expanded volume later, the broader market may repeatedly fluctuate and grind down at this level, and thematic sector performance may show differentiation. Therefore, before the broader market breaks through resistance with expanded volume, investors can participate appropriately in market structural opportunities, focusing on sectors and individual stocks with earnings that exceed expectations. Looking at the medium term, under the joint drivers of the continuation of a “dual easing” stance for fiscal and monetary policy, residents’ savings assets continuing to enter the market, improved corporate performance as “anti ‘involution’” efforts take effect, and ongoing breakthroughs in global AI technology, the foundation of this round of the A-share rally remains solid. It is expected that the Middle East conflict will only affect A-share market sentiment and trading tempo in the short term and will not change the market’s direction. We remain confident in the medium- to long-term favorable trend for the market and should not be overly worried.

Soochow Securities says that there have been many recent changes in the news cycle, with extreme volatility in the bulk-trade market; intraday, there could be many reversals due to new developments.

CICC says that perhaps this is a relatively low point for A shares in the medium term, and the deep sell-off has created a good opportunity to set up positions. Although near-term price action still has some uncertainty, after going through an adjustment, the market’s risk has been further released, and valuations are at relatively reasonable levels. In the medium term, the macro environment the market is in has not undergone fundamental changes; the logic supporting “steady progress” for A-share markets still holds. The release of risk and the downward adjustment bring favorable opportunities for allocation.

Guosheng Securities states that during short-term consolidation, market style may rebalance again, and some “old-guard assets” with low valuations could temporarily take the lead. From the medium-term main theme perspective, areas representing economic transformation and upgrading and the direction of security—such as artificial intelligence (AI) and advanced manufacturing—remain the core allocation directions. These areas have real industrial policy support and fundamental support; after the adjustment, they are more likely to lead the market out of a new uptrend.

Gothic HaiTong Securities says that due to the impact of the mid-term election, risks in the stock market and inflation risks to Trump will be significantly elevated, which may prompt the U.S. side to ultimately compromise or withdraw troops—i.e., Taco 2.0. Most Asian economies are oil importers. Similar to the U.S. stock market, if a turning point comes in the Iran conflict, emerging market equities will also become a major beneficiary.