Daily Review: Shanghai Index Probes Bottom and Rebounds with Slight Decline, Over 3,800 Stocks Across the Market Turn Red, Green Energy Sector Continues to Surge

Reprinted from: Cailian Press

Cailian Press, March 12 — The market has bottomed out and rebounded, with the three major indices narrowing their declines after midday. The combined trading volume of the Shanghai and Shenzhen markets reached 2.44 trillion yuan, a decrease of 66.5 billion compared to the previous trading day. On the sector front, some hotspots repeatedly gained strength, while nearly 3,900 stocks declined across the market.

In terms of sectors, the green energy concept exploded, with Green Power Generation, China Huadian Energy hitting the daily limit for three consecutive days, and GCL System Integration, Datang Power, Jinkai New Energy hitting the limit as well. The chemical sector continued to strengthen, with over a dozen constituent stocks hitting the daily limit. Golden Bull Chemical rose for nine days with five limit-ups, and Lu Hua Technology, Sanfangxiang, Hebang Biological also hit the limit. The coal sector was active, with Yankuang Energy and Zhengzhou Coal & Electric hitting the limit, and China Coal Energy reaching an 18-year high. The carbon fiber concept remained strong, with Sinoma Yingchuang and Jilin Chemical Fiber hitting the limit.

On the downside, the gas turbine concept experienced continuous adjustments, with Boyingte Welding and Hailianxun plunging sharply. The military industry sector weakened, with Hangya Technology and others falling back. By the close, the Shanghai Composite Index fell 0.1%, the Shenzhen Component Index declined 0.63%, and the ChiNext Index dropped 0.96%.

Sector Highlights

Throughout the day, the coal sector remained strong, with Zhengzhou Coal & Electric, Yankuang Energy, and Shaanxi Black Cat hitting the limit, while Jin Control Coal, Lu’an Environmental Energy, and Baotailong posted notable gains.

In the news, amid ongoing US-Iran conflicts, the global energy supply chain faces severe challenges. The price of thermal coal has surged to its highest level in over a year. According to Changjiang Securities, if the Strait of Hormuz remains blocked long-term, global coal demand for power generation could increase by 84.86 million tons annually; if China’s coal chemical plants operate at full capacity, this alone could boost domestic coal consumption by nearly 50 million tons.

Chemical stocks surged again, with Golden Bull Chemical, Ando Mie A, Sanfangxiang, Chengzhi Co., Huashu Co. hitting the limit, while Baichuan Co., Wanfeng High-tech, Yaxiang Co., and Xianda Co. posted strong gains.

In the context of ongoing US-Iran tensions, chemical production and exports in Middle Eastern countries like Iran are likely to be affected, leading to significant tightening of supply and rising prices for related chemical products. Notably, para-xylene hit the limit with a 13% increase, LU fuel oil rose over 14%, crude oil increased over 11%, PTA and bottle chips rose over 10%, fuel oil up over 9%, and short fibers increased over 9%.

Additionally, Hu’an Securities’ research report pointed out that the domestic chemical industry’s expansion cycle is nearing its end, with excess capacity being rapidly phased out. Coupled with overseas chemical capacity closures due to high energy costs, the supply-demand balance continues to improve, supporting the sector’s overall strength. However, after two days of volume-driven rally, market sentiment may be reaching a peak, and some stocks may retreat in the afternoon. In a market environment with rapid sector rotation, further divergence among sectors is possible.

The wind power sector strengthened in the afternoon, with multiple segments such as wind turbine equipment, wind power components, and offshore wind power rising simultaneously. Sany Heavy Energy gained over 11%, Zhenjiang Co., Dajin Heavy Industry, and Shuangyi Technology hit the limit, while Haili Wind Power, Sany Heavy Energy, and Jinlei Co. also posted significant gains.

In the news, the UK will abolish 33 wind power component import tariffs starting April 1, reducing tariffs on core parts like blades and cables from 6% and 2% to 0%, aiming to unlock £22 billion in investment and accelerate offshore wind installations in the North Sea. Wind power is also viewed as an extension of the green energy track. As core stocks related to green energy continue to rise from short-term highs, some funds are rotating within the sector between high and low positions.

Individual Stocks

On the stock level, the green power sector remains the most sustained trend, with Green Power Generation and China Huadian Energy both hitting the limit for three consecutive days, and Jinkai New Energy achieving five limit-ups in ten days. China Energy Construction recorded a turnover of over 17 billion yuan and hit the limit three times in five days, spreading across the sector. With accelerated capital inflows, the power industry chain may continue to see a phased rally. However, after today’s rapid midday surge, whether sufficient short-term funds can sustain the momentum remains uncertain. Previously strong grid equipment stocks like Huaming Equipment and Yigor both fell more than 9%, indicating that market style still favors high-low rotation. After the emotional high, more attention should be paid to sector internal stock rotation.

Market Outlook

Today, the market experienced a full-day oscillation with a bottoming and rebound in the afternoon. The three major indices narrowed their declines and remained above their 5-day moving averages, so the short-term rebound structure was not completely broken. However, trading volume shrank again, indicating limited new capital inflow. Without clear catalysts, high-level consolidation or sideways movement is likely.

From a sector perspective, the core remains centered on electric power stocks. The green energy sector has shown strong continuity recently, and with capital flow, related sectors like energy storage, wind power, and nuclear power are also favored. Compared to tech stocks, these sectors have clearer fundamentals and higher performance certainty, making low-priced stocks in these areas key targets for ongoing tracking.

Market News Highlights

1. Hong Kong ICAC: Joint operation with the Securities and Futures Commission to combat insider trading and corruption, resulting in 8 arrests

The Hong Kong ICAC announced that on March 10 and 11, they conducted a joint operation codenamed “Fuse” with the Hong Kong Securities and Futures Commission to crack down on suspected insider trading and corruption. Two securities firms, a hedge fund management company, and senior executives were involved. Law enforcement searched 14 locations, including offices and residences of the involved entities, arresting six men and two women aged 35 to 60. The investigation revealed that a senior executive at one securities firm allegedly received over $4 million in bribes from a hedge fund manager, leaking confidential information about Hong Kong-listed companies’ share placements. The hedge fund then took short positions, profiting from the decline in stock prices after the placements were announced, earning approximately $315 million. Earlier, Guotai Junan International announced that an employee was detained by the ICAC and taken from their home.

2. LeapStar joins “Little Lobster” battle, offering 50,000 free deployment slots

On March 12, LeapStar launched the cloud-based AI assistant StepClaw built on OpenClaw, opening 50,000 free “Little Lobster” deployment slots for a limited time, free for one month. The experience slots support one-click deployment of “Little Lobster” via the Leap AI app, and include a full package of 50 million model tokens, servers, and storage at no cost. It is also reported that on March 13, this feature will be available on the Leap AI web platform for deployment and use.

(Cailian Press, Fenglin)