A-share midday review | Market volatility intensifies, Shanghai Composite Index and ChiNext Index both fall more than 1% in the morning! Oil and gas industry chain, shipping concept collectively pull back.

The Middle East conflict is escalating, and investors are worried that the region will erupt into a prolonged military conflict. Global stock markets have been shaken, with US stocks falling, and Japanese and Korean stocks experiencing heavy losses, with the Korean stock market halted. Today, the three major A-share indexes opened with wide fluctuations and collectively closed lower. As of the midday close, the Shanghai Composite Index fell by 1.43%, the Shenzhen Component Index fell by 0.98%, and the ChiNext Index fell by 1.64%. Despite the short-term volatility in global markets, several institutions have also released a lot of "positive sentiment" recently: Timothy Moe, Chief Asia-Pacific Equity Strategist at Goldman Sachs, said that the situation in the Middle East could be a catalyst for a "much-needed technical adjustment" in the market, but from a strategic perspective, this is an opportunity to invest in ACR HOLDINGS because the fundamentals in that region are still constructive. Wei Jixing, Chief Analyst at Open Source Securities Strategy, said that investors should not shake their confidence in the positive market trend due to short-term fluctuations and adjustments. From a structural perspective, the A-share market still has room for expansion based on the securitization rate index. Frank Monkam, Head of Cross-Asset Macro Strategy and Trading at Buffalo Bayou Commodities, said that the attack on Iran has almost perfectly triggered the already fragile stock market sell-off, and the recent volatility may continue in the short term. However, geopolitical conflicts usually only trigger temporary sell-offs, not prolonged bear markets, so once the situation in the Middle East is fully digested, the stock market will eventually stabilize. Dai Qing, Chief Analyst at Changjiang Strategy, defines the market trend in March as the "second half of the spring frenzy." He believes that the market is expected to maintain a trend of volatile upward movement, with overall style possibly becoming more balanced. In terms of market performance, AI power concept stocks such as transformer, power grid equipment, ultra-high voltage, and smart grid are strong, with many stocks like Jiangsu Tongguang Electronic Wire&Cable and Integrated Electronic Systems Lab hitting the limit up; agricultural concept stocks such as grain planting, seed industry, and genetically modified crops continue to be strong, with stocks like Gansu Yasheng Industrial and China Agriculture Development Seed Group hitting the limit up; military industry chain stocks such as aircraft carriers, drones, defense military industry, and aircraft engines rebound, with Aerospace CH UAV and Guangdong Orient Zirconic Ind Sci & Tech hitting the limit up; HBM and storage chip concepts are rising, with Biwin Storage Technology hitting the limit up. In terms of declines, the oil and gas industry chain, including oil concepts, oilfield services, natural gas, and shale gas, are all down, with many stocks like Foran Energy Group and Daqing Huake hitting the limit down; the port and shipping concept is sharply down, with many stocks like Phoenix Shipping and Cosco Shipping Specialized Carriers hitting the limit down or approaching the limit down; gold, silver, and minor metals concepts continue to decline, with Mclon Jewellery falling by more than 10%; major financial sectors such as banks, insurance, and brokerage firms are collectively down; major consumer concepts such as liquor continue to weaken; AI application concepts such as AI animation, AI marketing, and AIGC continue to be weak; cyclical concepts such as chemicals are all down, with Yunnan Coal & Energy hitting the limit down. Hot Sectors: 1. AI power concept stocks are strong Transformer, power grid equipment, ultra-high voltage, smart grid, and other AI power concept stocks are strong, with stocks like Jiangsu Tongguang Electronic Wire&Cable and Integrated Electronic Systems Lab hitting the limit up. Comments: According to reports, in the past few months, the three major regional grid operators in the United States (Texas, the Mid-Atlantic region, and the Western Grid Management Department) have successively been approved for a total of $75 billion in transmission expansion projects, with the core being the construction of a batch of 765 kV ultra-high voltage lines, making it the largest and most powerful power line project in US history. 2. Oil and gas industry chain is down Oil concepts, oilfield services, natural gas, shale gas, and other oil and gas industry chain stocks are down, with Foran Energy Group and Daqing Huake hitting the limit down. Comments: Galaxy Futures pointed out that in the short term, crude oil is likely to experience significant volatility after a sharp rise in opening, with trading risks steeply increasing. However, according to the pattern of past geopolitical conflicts, a sharp rise followed by a fall may be the main trajectory of the future oil market. 3. Port and shipping concept is sharply down The port and shipping concept is sharply down, with stocks like Phoenix Shipping and Cosco Shipping Specialized Carriers hitting the limit down or approaching the limit down. Comments: In terms of news, US President Trump posted on social media: Effective immediately, I have directed the United States Development Finance Corporation (DFC) to offer political risk insurance and financial security for all maritime trade passing through the Gulf region (especially energy) at very reasonable prices. This will be open to all shipping companies. If necessary, the US Navy will start escorting oil tankers through the Strait of Hormuz as soon as possible. In any case, the US will ensure that energy flows freely around the world. More actions are imminent. 4. Precious metal concept is continuing to decline Gold, silver, minor metals, and non-ferrous metals concepts are continuing to decline, with Mclon Jewellery falling by more than 10%. Comments: In terms of news, yesterday, spot gold fell below $5000 per ounce, and spot silver fell below $79 per ounce. Michael Arone, Chief Investment Strategist at Boston Delaware Investments, said that the drop in gold prices - which fell 4% after hitting a four-week high on Monday - shows indiscriminate selling. Oil and the dollar are the only things people want to hold onto now. Institutional Views: Open Source Securities: A-share market still has room for expansion Wei Jixing, Chief Analyst at Open Source Securities Strategy, suggests that investors should not shake their confidence in the positive market trend due to short-term fluctuations and adjustments. Structurally, based on the securitization rate index, the current A-share market still has room for expansion, and combined with the relative profitability advantages of the technology, media, and communications sectors, the "AI+" phase is still expected to be supported. Changjiang: Market expected to maintain trend of volatile upward movement Dai Qing, Chief Analyst at Changjiang Strategy, defines the market trend in March as the "second half of the spring frenzy." He believes that the market is expected to maintain a trend of volatile upward movement, with the overall style possibly becoming more balanced. In terms of specific direction for allocation, Dai Qing recommends focusing on three main themes: technology direction, continued focus on the prosperity theme of AI infrastructure, including power, storage, and computing power directions, such as light modules, storage, and semiconductor equipment; attention to the energy revolution and opportunities brought by supply constraints, including lithium batteries and traditional energy such as metal and chemical industries; and focus on the automobile and other consumer sectors. China Securities Co.,Ltd.: Three levels of impact of the Iran situation on the capital market In recent years, the world faces technological challenges to industrial order, regional conflicts challenge globalization, and physical assets, forgotten in the prosperous period of order, will have systemic importance. Meanwhile, Chinese assets have the strongest physical attributes globally, and their reassessment in turmoil is worth paying attention to. By 2025, the market rise in China looks more like the overflow of US financial expansion and tech bubbles; at present, the volatility of transition period is inevitable, but remember it is not a bear market, but the eve of a new round of rise in Chinese assets. Sinolink: Market is in the evening before a new round of uptrend At present, the world faces challenges to industrial order due to technological challenges and challenges to globalization due to regional conflicts. Assets that have been overlooked during prosperous periods of order will be of systemic importance. Meanwhile, Chinese assets have the strongest physical attributes globally, and their reassessment during turmoil is worth paying attention to. By 2025, the market rise in China looks more like the overflow of US financial expansion and tech bubbles; at present, the logic switch period of volatility is inevitable, but it is important to note that it is not a bear market, but it is the evening before a new round of uptrend for Chinese assets. This article is reprinted from "Tencent Stock Selection", edited by GMTEight: Wang Qiujia.