A-shares opened lower and then rose steadily, with the Shanghai Composite Index regaining the 3,900-point level: 4,335 stocks rose, and the combined trading volume of the two markets was less than 1.9 trillion yuan.

Three major A-share stock indexes opened lower in unison on March 27. During the morning session, they fluctuated and then edged higher; even the Shenzhen Component Index and the ChiNext Index, which had once dropped by more than 1%, managed to turn red and move back into positive territory. In the afternoon, both markets saw high-level consolidation, with an even greater number of advancing stocks.

From the trading picture, the lithium battery and innovative drug themes surged, with non-ferrous metals, consumer discretionary, semiconductors, and the chemical industry sectors leading in gains. Power stocks showed mixed performance; the photovoltaic, wind power, insurance, and banking sectors weakened.

By the close, the Shanghai Composite Index rose 0.63% to 3913.72 points; the STAR 50 Index rose 0.93% to 1300.76 points; the Shenzhen Component Index rose 1.13% to 13760.37 points; and the ChiNext Index rose 0.71% to 3295.88 points.

Wind data showed that across both markets and the National Equities Exchange and Quotations (NEEQ), 4335 stocks rose, 1070 stocks fell, and 83 stocks were flat.

According to Da Zhihui VIP, among stocks across both markets and the NEEQ, 107 stocks had gains of 9% or more, and 4 stocks had declines of 9% or more.

Biopharmaceuticals and non-ferrous metals jointly led the two markets

In terms of sectors, biopharmaceuticals surged sharply early in the session and drove the indexes to turn higher. More than 20 stocks, including Shutai Shen (300204), Realscape Bio (688068), Sinovation Ventures (300765), Innotree (688710), Beili Tianheng (6885006), Haichen Pharmaceuticals (300584), and Bioscience (688796), hit the daily limit or rose more than 10%.

Non-ferrous metals opened lower but then rebounded strongly and surged. More than 10 stocks, including Wanshun Xincai (300057), Yongsan Lithium (603399), Shenzhen Xinxing (603978), Haixing Shares (603115), Yunnan Germanium (002428), Yongxing Materials (002756), and Rongjie Shares (002192), hit the daily limit or rose more than 10%.

Basic chemicals also saw strong gains. More than 10 stocks, including K2 Biotech (300858), Aoke Shares (300082), Shandong Haize (000822), Liuguo Chemical (600470), Chitianhua (600227), Black Cat (002068), and Suli Shares (603585), hit the daily limit or rose more than 10%.

Power stocks fell, which led to weak performance in the utility sector. Stocks such as Jiangsu Xinneng (603693), Jieneng Wind Power (601016), Guangdong Power A (000539), Huadian Xinneng (600930), Zhejiang Xinneng (600032), Changyuan Electric Power (000966), and Diesen Shares (300335) fell by more than 5%.

Bank stocks slid against the trend. Rural Commercial Bank of Feng (601528) briefly fell by more than 4%, Chongqing Rural Commercial Bank (601077) fell by more than 2%, and Zijin Bank (601860), Xiamen Bank (601187), Chongqing Bank (601963), Zhangjiagang Bank (002839), Changsha Bank (601577), among others, fell by more than 1%.

Coal stocks performed poorly. Liaoning Energy (600758) hit the daily limit down. Zhengzhou Coal & Power (600121), Shaanxi Black Cat (601015), Yunneng Energy (600792), Hengyuan Coal & Power (600971), and Su Neng Shares (600925) fell by more than 1%.

A-shares still show resilience

Dongwu Securities said that technically, the rapid contraction in trading volume indicates, to a certain extent, the cautious attitude of market funds. Funds that had exited earlier have not returned in any significant way, while confidence among in-market funds is relatively fragile under conditions where news changes quickly. Under the prompting of news, the market has shifted into a state of reduced volume and downside movement. It is worth noting that currently, the main risks are external geopolitical conflicts. If easing signals appear again later, upside momentum in the market should still remain strong. Overall, fundamental economic data has been relatively stronger, and the resilience of the A-share market remains intact; optimism is still needed in this phase.

Caitong Securities said that after the large-cap index experienced two consecutive days of rebound, although the market bottom may already have been established in the current phase, due to the accumulation of trapped positions from the earlier rapid selloff, major indexes are now approaching resistance levels. A quick breakout requires steady expansion in trading volume to work together. After large prior fluctuations, market confidence needs rebuilding. In addition, the global “stagflation-like” impact brought by the energy crisis is unlikely to fully fade in the short term. Some funds may continue to stay on the sidelines. With total market turnover on the day still below 2 trillion yuan across the entire market, the large-cap index saw a pullback. On the board, the “dividend” direction performed relatively better, while the STAR Market direction generally weakened. Looking ahead, although the situation in the Middle East may still have twists and turns, the event is likely to move toward stability; therefore, the marginal impact on A-shares will also diminish. In the short term, the large-cap index may continue to follow a rebound trend. However, the global “stagflation-like” effect stemming from the overseas energy crisis, as well as performance risks brought by A-share earnings season, will both suppress the timing of incremental fund inflows. There will be some pullbacks during the rebound of the large-cap index. Based on this, in the near term, the large-cap index may show a structural market characterized by differentiation among theme sectors. From a medium-term perspective, as fiscal policy and monetary policy continue with a “two-loose” stance, residents’ savings assets keep entering the market, “anti-overcollaboration” improves listed companies’ performance, and global AI technology continues to make breakthroughs—these combined drivers mean that the foundation for this round of A-share market remains solid. It is expected that this Middle East conflict will only affect the A-share market’s short-term sentiment and trading tempo, and will not change the market direction. We remain confident in the medium- and long-term favorable trend for the market and advise against over-worrying.

Industrial Securities said that currently, the Middle East geopolitical conflict continues to escalate, with volatility in global commodities markets increasing. Investors are highly focused on energy supply security, the evolution of inflation expectations, and the direction of allocation across major asset classes. Wang Han, chief economist at Industrial Securities, said that at the strategic level, A-shares should not be overly pessimistic and have clear support. The certainty of China’s long-term economic development provides solid support to the market. At the same time, domestic capital market regulation and macro decision-making attach great importance to market stability, and A-shares have the role of a “pillar that stabilizes the sea.” Although preventing Western countries from constraining China’s development remains a core external constraint, with the U.S. in a passive situation in the Middle East, it objectively creates a more favorable strategic environment for China. At the tactical level, the market needs to face the worsening volatility directly and adhere to an inverse-trading mindset. Capital markets naturally dislike risk, and A-shares are especially sensitive to it. If the U.S. increases military actions against Iran, dispatches more ground forces, or if oil transport through the Strait of Hormuz is disrupted, investors with shorter debt maturities will be the first to generate a flight-to-safety demand. And if the local geopolitical situation falls into a stalemate for months, institutional investors will also turn more cautious. In the short term, Iran does not yet have tactical advantages, and the U.S. will most likely achieve some partial tactical results. Therefore, the impact of the U.S.’s stage-by-stage tactical victories should be handled using an inverse approach, avoiding blindly following and chasing highs.

AVIC Securities said that currently, there is no clear easing in the U.S.-Iran conflict. Trump’s announcement to postpone his visit to China also points to the continuation of overseas disruptions in the short term. Due to inflation concerns caused by rising oil prices, the March FOMC meeting overall was more hawkish, and the probability of interest rate hikes as a potential policy option has risen. Therefore, the external disruptions the market faces are still ongoing. During the first benign adjustment period in the growth industry cycle, although the duration may not be very long, the main industries and representative names usually go through a three-stage rhythm of “falling → rebounding → falling,” with wide swings in both directions during the process. We believe that in the recent market’s environment of a big drop, the strong leadership shown by representative growth names and the communication sector is the rebound-up process in the middle stage of the three stages. Going forward, representative growth names and the communication sector may still experience a “final drop,” which is what will solidify the foundation for a new round of upward move.

Orient Securities said that the thinking the current geopolitical conflict leaves to the market is how the energy system will be repriced and how global energy allocation patterns will be reshaped. Therefore, future energy policies will shift toward “independent, controllable + diversified substitution.” From the perspective of investing in A-shares, directions benefiting from new energy power generation, energy storage, and power grid equipment are worth continued attention by investors. From a technical perspective, the market’s volume-contracted adjustment trend is a secondary bottoming process; around the 3850-point area of the Shanghai Composite Index, a small-scale rebound is likely to occur.

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