Market Close: The Shanghai Composite Index rose 0.63%, with strong performance in the non-ferrous metals and chemical sectors. Innovative drug concepts and other areas were active.

On March 27, the Shanghai Composite Index rose steadily in the afternoon, with the Shenzhen Component Index and others up over 1%. More than 4,300 stocks in the A-share market were in the green.

By the close, the Shanghai Composite Index was up 0.63% at 3,913.72 points, the Shenzhen Component Index rose 1.13%, the ChiNext Index increased by 0.71%, and the STAR Market Composite Index climbed 1.54%. The total trading volume of the Shanghai, Shenzhen, and Beijing stock markets was approximately 1.86 trillion yuan.

From a sector perspective, electricity, insurance, banking, and coal sectors fell; meanwhile, pharmaceuticals, non-ferrous metals, and chemicals saw strong gains, with agriculture, food and beverages, steel, semiconductors, and oil sectors rising, and lithium batteries and innovative drug concepts being active.

Dongxing Securities pointed out that the direct impact on the A-share market is due to rising energy prices. As one of the world’s major oil importers, high oil prices bring cost pressure, which is a direct trigger. At the same time, rising energy prices raise further concerns about global economic recession, subsequently affecting the overall environment for Chinese manufacturing exports. Additionally, rising energy prices lead to changes in the Federal Reserve’s monetary policy pace, with market expectations for interest rate cuts significantly delayed, and the strengthening dollar putting pressure on global capital markets. A de-escalation of conflicts to some extent is conducive to a rebound in market risk appetite, significantly reducing the short-term disruptive impact of oil prices. The market is returning to fundamental logic, and growth stocks that had seen noticeable adjustments earlier are expected to stop falling and rebound. The market retraced from the previous range of 4,000 to 4,200 points to the range of 3,800 to 4,000 points, with a new market bottom expected to form around 3,900 points. Based on the impact of several wars, including the Iraq War and the Russia-Ukraine conflict, on capital markets, these are all short-term disruptive factors that do not constitute long-term core issues. Therefore, the market is expected to build a medium-term bottom area, and from an annual perspective, the area around 3,800 points is likely to become a medium-term layout zone. The core logic of the A-share market’s operation remains the progress of domestic economic recovery, monetary policy, and industrial upgrades, with the industrial development direction in the “14th Five-Year Plan” still being the focus of growth stock layouts.