Top 10 Institutions Discuss the Market: Expectations of U.S.-Iran Conflict Fluctuate, A-shares Continue on Their Own Path

This week, the Shanghai Composite Index fell 0.70%, the Shenzhen Component Index rose 0.76%, and the ChiNext Index increased 2.51%. How will the A-shares perform next week? We have summarized the latest investment strategies from major institutions for investors’ reference.

Shenwan Hongyuan Strategy: Expectations of US-Iran Conflict Fluctuate, A-shares Progress Along Their Own Path

Expectations of US-Iran conflict fluctuate, but A-shares show resilience. Policies aimed at stability and long-term development have prevented excessive gains earlier. Market expectations for mid-term trends are important foundations. Meanwhile, A-shares have significantly improved in pricing against geopolitical conflicts, effectively integrating short-, medium-, and long-term projections, reflecting changes in relative national strengths and China’s ability to maneuver in complex overseas environments. A-shares are embracing “competitive thinking,” adapting to frequent geopolitical tensions. They are moving along their own path, with the “two-stage bull market” unfolding. Overall, A-shares’ static valuation remains at a historical high, increasing resistance to valuation expansion. Currently, the market is transitioning from a structural bull to a range-bound oscillation, which will help build momentum for a comprehensive bull phase.

Galaxy Strategy: “14th Five-Year Plan” Sets the Tone, Where Does A-shares’ Resilience Show?

Since the end of February, escalating US-Iran tensions have repeatedly disturbed market sentiment. Sharp oil price fluctuations have driven inflation expectations higher. The Federal Reserve’s rate cut expectations have been dashed, suppressing risk asset performance. Compared to this, in the context of global equity markets generally adjusting, A-shares have demonstrated strong resilience. The 2026 government work report emphasizes domestic demand-led growth, cultivating new drivers, and achieving high-level technological independence. The “14th Five-Year Plan” outline is based on continuity and high-quality development as primary goals, highlighting the modernization of industrial systems and strategic importance of technological self-reliance. It insists on expanding domestic demand as a strategic foundation. From a long-term perspective, this clarifies the investment logic of seeking “quality” in “new” growth. Supported by A-shares’ inherent resilience and “my initiative” connotation, the market will gradually shift from “emotion-driven” to “fundamentals-driven,” with performance becoming the core anchor in the next phase.

Industrial Strategy: Lessons from Six Past Oil Price Upward Cycles for Current Trading

Based on the current assumption that “the most intense phase of conflict may have gradually passed, but oil prices will remain high for a period,” we suggest two strategic approaches: first, sectors whose prices can link with oil prices and benefit from rising oil—such as upstream energy industries like crude oil extraction, oil services, shipping, coal, natural gas, coal chemicals, renewable energy, as well as cost-driven sectors like fertilizers, pesticides, and agricultural products. Second, sectors with independent industry trends, less affected by oil price fluctuations, and benefiting from potential reversals—AI and advanced manufacturing are prime examples, supported by industry trends and policy backing.

CMB Strategy: What Investment Opportunities Might the “14th Five-Year Plan” Bring?

Post-outline, the probability of market gains is higher, with small-cap stocks outperforming. Historically, after the first four releases of the plan, the market tends to rise within the week and until the end of the month. The average returns of indices like CSI 1000 are higher compared to CSI 300. Which sectors perform better after the plan’s release? Within the first week, construction materials and social services show higher gains; from the plan’s release to month-end, sectors like coal, construction materials, real estate, and defense military industry tend to outperform.

Hua Jin Strategy: Short-term Resilience of A-shares Remains Strong, What Are This Year’s Main Industry Themes?

A-shares may remain resilient in the short term, with the spring rally not over. (1) Short-term economic recovery and profit growth may still be underway: first, the economy is still recovering, with February exports up 39.6% year-on-year, and subsequent export slowdown pressures may be lower than expected; second, seasonal effects could support gradual economic recovery. Second, short-term earnings growth may continue to rebound, as profits are likely in a recovery cycle. (2) Liquidity may remain loose: macro liquidity could stay ample, supported by a strong RMB and energy advantages, even if the Fed does not cut rates; the central bank may also increase liquidity through RRR cuts or rate reductions. (3) Risk appetite may stay neutral with some support: positive policies can support risk appetite; geopolitical risks persist but their impact may weaken.

Zheshang Strategy: Geopolitical Tensions Continue to Disturb Markets, Maintain Confidence and Optimize Structure

Looking ahead, as the US repeatedly states “military actions are nearing end,” global risk appetite has rebounded and volatility has eased compared to last week. However, Iran remains firm, and conflicts have not ceased. Combining these factors, we believe the current geopolitical tension has peaked but has not fully subsided. With external influences waning, and based on intrinsic trends of A- and H-shares, we expect the market to fluctuate within a range. A-shares, having undergone sufficient adjustment and with improving structure, may stabilize after mid-March. Some growth stocks, due to recent MACD bearish divergence and large gains since last year, may face earnings pressure during earnings season, stabilizing after April. Among H-shares, Hang Seng Tech, which declined rapidly earlier, may still need consolidation and a second confirmation. From a quarterly perspective, we remain optimistic about “systematic slow bull” opportunities.

Zhongtai Strategy: Long-term Geopolitical Tensions and Their Impact, How to Allocate?

Considering core interests and strategic game structures, we believe this round of conflict may last longer than market expectations. It becomes a “war of attrition,” with the key being both sides “competing on costs and endurance.” The initiative to end the war lies with Iran, not the US. This conflict benefits Iran: domestically, it boosts national unity and consolidates regime legitimacy; internationally, it increases pressure on Trump and helps him negotiate more favorable ceasefire terms. If the conflict exceeds expectations, crude oil prices may rise further, with increased volatility and high-level oscillations. Correspondingly, global risk assets may face systemic tightening. High oil prices will boost inflation expectations and influence policy rates, continuing to pressure tech stock valuations.

Guoxin Strategy: How Much Room Is Left for Strategic Resources?

Despite short-term disruptions from geopolitical tensions and tariffs, the mid-term outlook remains positive. The current bull market, which started around September 2024, shows no signs of reversing. Multiple factors support the continuation of the bull trend. Domestically, policies remain proactive, with signs of economic improvement. The government’s work report emphasizes more active fiscal policies and moderate easing of monetary policy to achieve better economic growth. February PPI rose 0.4% month-on-month and contracted 0.9% year-on-year; CPI increased 1.0% month-on-month, indicating easing deflationary pressures. Abroad, expectations of Trump’s visit to China boost market sentiment. The White House announced Trump’s visit at the end of March, likely stabilizing US-China relations temporarily and supporting market confidence. From a medium- to long-term view, as macro and micro fundamentals recover and spread, coupled with increased resident capital entering the market, the 2026 A-shares bull market is expected to enter its latter phase.

Dongwu Strategy: Four Approaches to Hedge Oil Price Rises

Overall, oil prices are prone to rise, with four allocation strategies: (1) High inflation weakens non-US assets, making Chinese assets relatively safer and potentially independent; however, liquidity constraints favor value over growth, China over US and other emerging markets. (2) Focus on the transmission of price increases along the supply chain, such as chemical and agricultural sectors, which tend to outperform and align with oil prices; sustained upward trends depend on overseas demand, especially sectors like energy storage, AI, and machinery with high overseas demand. (3) Substitution effects can ease energy price surges—attention to coal and renewable energy construction, including energy security, AI, energy storage, wind, solar, lithium batteries, and power grids. (4) Energy dependence impacts industries in Japan and Korea, temporarily boosting storage prices, mid-term affecting AI applications, and long-term potentially shifting China’s chip market share globally.

Zhongyuan Strategy: Clearer Policy Tone Provides Solid Bottom Support

Recent Middle East tensions have caused global market turbulence, with soaring oil prices raising “stagflation” concerns and dampening risk appetite. However, clearer domestic macro policies provide a solid bottom line. The central bank has emphasized flexible use of RRR cuts and rate reductions to maintain ample liquidity; also supporting China’s state funds to stabilize the market. The Shanghai Composite Index is likely to remain in a slight range-bound consolidation. Investors should closely monitor macroeconomic data, overseas liquidity, and policy developments. Short-term opportunities may arise in sectors like batteries, wind power equipment, electronic components, and photovoltaics.

(Source: Oriental Fortune Research Center)