Jufeng Market Commentary: Shanghai Composite Index Fails to Hold 3800 Points, Gold Sector Plummets

What are the key driving factors behind the sharp fluctuations in the A-share market?

Author | Ding Zhenyu, Editor | Liang Puxi

Source: Jufeng Investment Advisory, Good Stocks App

Market Brief

On Monday, the A-shares fluctuated and bottomed out, with the three major indices dropping over 4% intraday. In terms of sectors, coal, oil and gas extraction, and oil services rose against the trend, while precious metals, agriculture, forestry, animal husbandry, tourism, medical beauty, sports, aviation airports, components, computer equipment, and optical electronics led declines. Among thematic stocks, helium concept stocks gained the most, while under-display cameras, pork, aquaculture, chicken, GMO, vitamins, AI chips, pre-made dishes, beer, and micro-cap stocks declined sharply.

Hot Sectors

Coal sector strengthened, with Yun Coal Energy, Shanxi Coking Coal, and Liaoning Energy hitting the daily limit. Shaanxi Black Cat, Pingmei Shares, and Shanxi Coking also saw significant gains.

Photovoltaic equipment performed well, with Huamin Shares hitting the 20cm daily limit, and Zhengtai Power, GCL Integration also reaching the limit. Shouhang Energy Conservation, Orient Sun, Maiwei Shares, and Shuangliang Energy-saving led the gains.

News Highlights

Financial Law Draft Publicly Seeks Opinions: Establish and Improve Rapid Response Mechanism for Financial Market Risks

The “Draft of the Financial Law of the People’s Republic of China” is open for public comments. It emphasizes strengthening financial market risk monitoring and establishing a sound rapid response mechanism to handle major risks such as abnormal market fluctuations, panic, and liquidity shortages.

Central Bank: The macro-prudential adjustment coefficient for domestic enterprises’ overseas loans increased from 0.5 to 0.6

On March 20, the People’s Bank of China and the State Administration of Foreign Exchange jointly issued the “Notice on the Management Measures for Domestic Enterprises’ Overseas Loans,” further supporting and regulating overseas lending by domestic companies. The main content includes raising the macro-prudential adjustment coefficient from 0.5 to 0.6 and increasing the overall limit for overseas loan balances to better meet companies’ cross-border operational funding needs.

National Energy Administration: During the 14th Five-Year Plan, actively promote the development of diversified clean energy

The China Development Forum 2026 Annual Conference opened yesterday (22nd) in Beijing. Vice Director of the National Energy Administration, Wan Jinsong, stated that during the 14th Five-Year Plan, China will ensure stable energy supply while actively promoting the development of wind, solar, nuclear, and biomass energy, forming a new energy system with multi-energy complementarity and strong risk resistance. Additionally, efforts will be made to deeply integrate energy revolution with digital revolution.

Jufeng Viewpoint

On Monday, the A-shares opened lower, with the Shanghai Composite down 1.32%, Shenzhen Component down 1.78%, and ChiNext down 1.54%. Small gains were seen in coal and oil & gas extraction sectors at the open, while sectors like precious metals, components, communication equipment, non-ferrous metals, semiconductors, wind power equipment, consumer electronics, energy metals, and military electronics declined sharply.

In terms of hotspots, the photovoltaic sector continued its strong momentum from Friday, with power, wind power, and grid equipment sectors active. The Shanghai Stock Exchange accepted the IPO application of Yushu Technology on the STAR Market, boosting the humanoid robot sector. International oil prices surged, attracting funds into new energy vehicles and electric vehicle sectors, with Xinri Shares, Aima Technology, and Hainan Haimo Auto hitting the daily limit, and BYD rising over 8%.

In the afternoon, spot gold plummeted 7%, breaking below $4,200. Coal, power, photovoltaic, and auto sectors retreated, with declines deepening in gold, banking, insurance, securities, hospitality, home appliances, and semiconductors. The Shanghai Composite broke below 3,850 and 3,800 points; all three major indices fell over 4%, with over 5,200 A-shares declining. Toward the close, coal and power sectors rebounded, bringing the Shanghai Composite back above 3,800 points.

Currently, the market shows clear differentiation, with resource stocks like oil and gas moving opposite to tech stocks. Given the ongoing external black swan events, the A-share trend is expected to be volatile. Investors should focus on buying the dips of previously hot industry leaders.

From a long-term perspective, Jufeng Investment Advisory believes that with policy stimulus, A-shares and the economy are likely to experience a synchronized turning point upward. Medium-term, it recommends focusing on high-growth sectors such as semiconductors, consumer electronics, AI, robotics, and commercial aerospace. For risk-averse investors, broad-based ETFs like CSI A500 ETF and CSI 300 ETF are suggested for dip buying.

Author: Ding Zhenyu
Professional Certification: A0680613040001

Disclaimer: The above content is for reference only and does not constitute specific investment advice. Trading based on this information is at your own risk.

Author’s note: These are personal opinions for reference only.