A-share Market Closing Review | Two main factors causing disturbance! Index plunges in the afternoon, SME Chinext index drops more than 2%

In the afternoon market today, there was a plunge, with the ChiNext Index falling by more than 2%. Funds concentrated on low-level sectors such as finance, real estate, and consumption, while the computing power sector suffered a major setback. The market saw a total turnover of 2.2 trillion yuan for the entire day, a decrease of over a trillion compared to the previous trading day, with over 4500 stocks declining in both markets. Of note, there are two major risk factors in the current market that deserve attention: On Monday, the Shah high-sulfur gas field in the UAE was attacked by drones, causing a fire. At the same time, a spokesperson for the Iraqi Ministry of Oil confirmed that the core asset Majnoon oil field in southern Iraq was also attacked, but specific details of the losses were not disclosed. Tensions in the Middle East are escalating, and after a continuous decline, the price of crude oil has rebounded strongly to over 100 US dollars per barrel. In addition, after NVIDIA announced multiple technological breakthroughs at the GTC conference, the A-share computing power industry chain experienced a sharp decline. Analysts believe that some of the new generation chips announced by NVIDIA are expected to be launched in 2028, causing disturbance to the market's short-term sentiment. Although the iterative development of related optical communication technologies provides long-term benefits, for funds seeking certainty, the impact of this positive news on the industry chain's future growth is still unknown. Additionally, with high valuations and significant previous gains in the industry chain, there is substantial short-term downside pressure. In the market, large financial stocks went against the trend and performed strongly, with insurance and bank sectors leading the gains. Shanghai AJ Group hit the limit up, while CITIC BANK, New China Life Insurance, and China Pacific Insurance all closed higher. The chemical industry sector saw repeated activity, with Guizhou Chitianhua hitting the limit up for three days in a row, and Jiangsu Sanfame Polyester Material, Kingenta Ecological Engineering Group, and Shanxi Lu'an Chemical Technology all closing higher. The real estate sector fluctuated higher, with Shenzhen Centralcon Investment Holding and Beh-Property hitting the limit up. On the downside, the computing power hardware, semiconductor, and other sectors led the declines. Among them, the CPO concept collectively adjusted, with stocks like Suzhou Everbright Photonics, Wuxi Taclink Optoelectronics Technology, Robotechnik Intelligent Technology, and Advanced Fiber Resources experiencing significant declines. Looking at individual stocks, there were 867 gainers and 4541 losers in the two markets, with 81 stocks remaining unchanged. There were 52 limit up stocks and 15 limit down stocks. At the close of trading, the Shanghai Composite Index fell by 0.85% to 4049.91 points, with a turnover of 951.2 billion yuan; the Shenzhen Component Index fell by 1.87% to 14039.73 points, with a turnover of 125.66 billion yuan. The ChiNext Index dropped by 2.29% to 3280.06 points. Funds flow Today, main funds focused on grabbing securities, banks, insurance, and other sectors. Some of the top stocks in terms of net inflows from main funds included GCL System Integration Technology, Sensteed Hi-tech Group, and Huadian New Energy Group Corporation. News recap 1. National Energy Administration: Electricity consumption increased by 6.1% year-on-year in January-February 2026 The National Energy Administration released data on electricity consumption for January-February. In the first two months, total electricity consumption reached 1.6546 trillion kilowatt-hours, an increase of 6.1% year-on-year. Looking at electricity consumption by sector, electricity consumption in the primary sector was 22.3 billion kilowatt-hours, an increase of 7.4% year-on-year. Electricity consumption in the secondary sector was 102.79 billion kilowatt-hours, an increase of 6.3% year-on-year, with industrial electricity consumption increasing by 6.4% year-on-year and electricity consumption in high-tech and equipment manufacturing industries increasing by 10.6% year-on-year. 2. Ministry of Finance: Continue to implement a more proactive fiscal policy in 2026 The Ministry of Finance released a report on the implementation of China's fiscal policy in 2025. In 2026, a more proactive fiscal policy will continue to be implemented, focusing on five aspects: expanding the scope of fiscal expenditure to ensure necessary support, optimizing the composition of government bond instruments to maximize their benefits, improving the efficiency of transfer payment funds to enhance local autonomy in the use of financial resources, continuing to optimize expenditure structure to strengthen support for key areas, and enhancing financial-fiscal coordination to enhance policy effectiveness and unleash the vitality of microeconomic entities. 3. Alibaba launches the world's first enterprise-level Agent platform "Wukong" Alibaba has launched the world's first enterprise-level AI-native workplace platform, "Wukong," enabling every team and company to have a 24-hour working "lobster legion." Wukong is an independent application that has started beta testing and will also be directly integrated into DingTalk, a platform used by over 20 million corporate organizations. Wukong fully supports connecting users to their DingTalk accounts, secure access permissions, and application systems within the enterprise. Future market judgment 1. China Securities Co.,Ltd.: Market consolidation provides opportunities for positioning Looking ahead, market consolidation provides a good opportunity for positioning. Funds have gradually shifted from speculative themes at high levels to core assets with fundamental support, forming a dual-line pattern of high-end manufacturing technology and strategic energy resources. Technology assets have been influenced by positive fundamentals such as the top-level policy implementation in the hydrogen energy industry, the explosive demand for global AI computing power, and the acceleration of domestic high-end manufacturing substitution. Coupled with the return of overseas tech stocks sentiment, they continue to attract incremental funds' attention. At the same time, the price increase logic brought about by the optimization of the strategic energy resource supply structure and the high certainty of performance during the annual report disclosure window may further promote market stabilization and upward movement. It is recommended to actively focus on investment opportunities in the high-end manufacturing technology growth and strategic energy resource sectors. 2. CICC: Emphasize "industry development" rather than "immediate layout" The investment strategies for future industries and emerging industries differ, with most fields in the A-share market still in the very early stages. It is suggested to focus on "industry development" rather than seeking immediate layout. In the medium to short term (around one year), attention can be kept on the progress of future industries, but most sectors do not necessarily require an "immediate layout." Instead, it is important to focus on the matching risks between asset prices and enterprise development at present. In the long term (more than one year or longer), as the industry develops and the application roadmap becomes clearer, more excellent companies emerge, and the competitive landscape becomes clearer, further investment opportunities can be sought.