Trump issues tough words again to Iran, 4,400 A-shares decline, three major sectors become safe havens!

Questioning AI · How will Trump’s Iran remarks continue to disrupt the A-share market?

Key points of the full text: On April 2, the A-share market experienced a broad adjustment, with the Shanghai Composite down 0.74%, Shenzhen Component down 1.6%, ChiNext down 2.31%, and the STAR 50 down 2.77%. Trading volume shrank to 1.86 trillion yuan, with nearly 4,400 stocks declining. Oil and petrochemicals, agriculture, forestry, animal husbandry, and fishery sectors led the gains against the trend, driven by a sharp rise in international oil prices, Jereh’s large overseas orders, and central pork reserve policies. Short-term volatility persists, with balanced allocations recommended for the medium to long term.

By the close, the three major indices all declined: the Shanghai Composite fell 0.74% to 3,919 points, the Shenzhen Component dropped 1.6%, and the ChiNext declined 2.31%. The total market turnover was 1.86 trillion yuan, 167 billion yuan less than the previous trading day, with nearly 4,400 stocks falling, indicating a clear cooling of market sentiment.

The direct trigger for the adjustment came from external factors. On April 1, U.S. President Trump delivered a nationwide televised speech, claiming an “overwhelming victory” in the Iran conflict, but also explicitly stating “in the next two to three weeks, we will strike them very hard”, and threatening to target all Iranian power plants if no agreement is reached. This statement shattered market expectations of a quick U.S.-Iran ceasefire, causing international oil prices to surge, with Brent crude surpassing $108 per barrel, and Asian-Pacific stock markets coming under pressure.

Looking at the index structure, the differentiation between large and small caps is very prominent. The STAR 50 declined the most, by 2.77%, ChiNext fell 2.31%, while the Shanghai Composite only dropped 0.74%, showing a typical pattern of weight-driven support and growth correction. Hong Kong markets also came under pressure, with the Hang Seng Index down 1.14% and the Hang Seng Tech Index down 2.01%, consistent with the adjustment trend in China’s tech sector.

Sector performance was sharply divided. Leading sectors included energy and agriculture: oil and petrochemicals rose 1.88%, agriculture, forestry, animal husbandry, and fishery increased 1.53%, coal rose 0.98%, and banks gained 0.56%. Conversely, most technology growth sectors declined: computers fell 3.11%, electronics dropped 2.86%, media declined 2.64%, and real estate also fell 2.25%.

Today’s most notable development was the countertrend surge in the oil and petrochemical sector. Several stocks like CNPC Engineering, Beiken Energy, and Blue Flame Holdings hit the daily limit. Three forces drove this: first, Trump’s tough stance on Iran directly pushed up international oil prices, with Brent surpassing $105, providing the most direct event-driven boost to energy stocks; second, Jereh announced its subsidiary signed a $301.4 million gas turbine generator sales contract with U.S. clients, confirming the accelerating trend of domestic energy equipment companies expanding overseas; third, Premier Li Qiang emphasized advancing new power grid construction during a Sichuan inspection, reinforcing the stable position of traditional energy. Under this triple resonance, funds flocked to energy sectors.

Another leading sector was agriculture, forestry, animal husbandry, and fishery, which rose 1.53%, with Giant Star Agriculture hitting the daily limit. The immediate driver was a pre-market announcement from the National Development and Reform Commission: the second batch of central frozen pork reserves will be collected this year, with local governments required to implement it simultaneously, strengthening pig production capacity regulation. The reserve policy stabilized pig prices expectations, easing concerns over losses in breeding enterprises. The policy also clearly states that efforts to increase reserves will continue, which is beneficial for clearing excess capacity in the medium to long term and returning the industry cycle to a reasonable range.

Additionally, the pharmaceutical and biotech sector performed strongly today, with nearly ten stocks like Hefu China and Peking Medical hitting the daily limit, reflecting a preference for defensive stocks amid market adjustments.

Regarding the outlook, in the short term, the trajectory of the U.S.-Iran conflict remains the primary external risk factor suppressing risk appetite. Given the significant gap in core demands, “conflict while negotiating” is highly probable. In this context, a bottoming out of the indices is becoming a market consensus, supported by China’s stable market mechanisms providing a safety net. Meanwhile, compared to overseas markets, A-shares show stronger resilience, with a higher probability of cyclical macroeconomic improvement.

For short-term allocation, defensive styles and energy security sectors are relatively favored, with high-dividend assets becoming more attractive. High-dividend sectors like banks, utilities, and coal continue to draw attention, along with energy security-related oil & gas and power equipment sectors.

From a medium to long-term perspective, the macro environment remains fundamentally unchanged — the upward cycle of A-shares is intact. The recent corrections in sectors like computers, electronics, and media are more about emotional release after trading congestion. However, it’s important to note that this year, the core valuation logic of A-shares is shifting from “valuation-driven” to “profitability-driven,” which will accelerate sector differentiation, with performance realization becoming a key factor.

For medium to long-term allocation, technological innovation remains the core theme, but focus should be on areas with solid earnings support. Recently, sectors like power equipment, electronics, machinery, communications, and non-ferrous metals have attracted attention. Specifically, areas with independent industry trends such as AI computing power (optical modules), semiconductor equipment, and innovative drugs less affected by oil prices are expected to regain market focus first after stabilization.

Strategically, a balanced allocation approach is recommended. One part involves high-dividend, undervalued defensive assets (banks, utilities, coal) and sectors benefiting from energy security logic, serving as a foundation to withstand volatility; the other part involves growth sectors with solid fundamentals (power equipment, AI computing power, innovative drugs, semiconductors), which can be targeted once market sentiment stabilizes. This “dumbbell” allocation considers both short-term uncertainty and the strategic value of long-term technological innovation.

Note: Markets carry risks; investment should be cautious. This article is based on publicly available information and does not constitute any investment advice.

Author’s statement: Personal opinions only, for reference.