A-share midday review | Multiple negative factors combined to pressure the index! The Shanghai index fell by 0.95% in the morning session, while the oil and gas industry chain strengthened collectively.

Due to the escalation of conflicts in the Middle East and soaring oil prices, global inflation uncertainty has intensified, leading the Federal Reserve to maintain interest rates unchanged and signal a "higher and longer" interest rate policy. Global risk appetite has been suppressed. The Asia-Pacific stock market opened lower, with crude oil continuing its overnight rally. Multiple bearish factors have put pressure on A-shares, causing the market to enter into a risk-averse mode once again. By midday, the Shanghai Composite fell by 0.95%, the Shenzhen Component Index dropped by 1.11%, and the ChiNext Index declined by 0.11%. The turnover in Shanghai and Shenzhen markets reached 1.3 trillion yuan in the first half of the day, up from 649 billion yuan on the previous trading day. In terms of market performance, the oil and gas industry chain saw a collective strength, with Shanxi Guoxin Energy Corporation hitting the limit up. The coal sector saw a volatile rise, with Shaanxi Heimao Coking closing limit up. Concepts related to green electricity and algorithm electricity saw repeated activity, with stocks like Huadian Liaoning Energy Development and NYOCOR hitting the limit up. The computing power leasing sector maintained its upward trend, with stocks like Beijing Topnew Info&Tech hitting the limit up. Wind power, photovoltaics, and lithography sectors saw gains during trading hours, while banking stocks rose initially but later fell back. On the downside, gold, non-ferrous metals, and rare earth sectors led the market declines, with stocks like Willing New Energy falling sharply. The chemical industry sector continued to weaken, with stocks related to glyphosate, fertilizers, and fibers leading the declines. The commercial aerospace concept saw a one-day surge, while sectors like electric machinery and PEEK performed weakly. Airport and aviation sectors saw a fluctuation and decline, while stocks related to lithium extraction, organic silicon, new stocks, steel, consumer goods, and pharmaceuticals all showed widespread declines. Looking ahead, Huatai Research Institute's Chief Strategy Analyst He Kang stated that overall, risk appetite has cooled down, with geopolitical tensions and rising oil prices remaining the main contradictions in market pricing. Morgan Stanley also mentioned that due to the surge in oil prices and heightened stagflation concerns, Asian stock markets will further decline. Garner and other analysts wrote, "In adverse circumstances, we expect Asian markets to fall to our pessimistic scenario target, which is 15-20% lower than the current level." Popular Sectors: 1. The oil and gas industry chain showed collective strength, with Shanxi Guoxin Energy Corporation hitting the limit up. The coal sector saw a volatile rise, with Shaanxi Heimao Coking hitting the limit up. 2. Concepts related to green electricity and algorithm electricity were strong, with stocks like NYOCOR, Beijing Orient EcoEnergy, Guangdong Electric Power Development, Guangdong Shaoneng Group, Sichuan Guangan AAA Public, and Huadian Liaoning Energy Development hitting the limit up. 3. The computing power leasing concept saw repeated activity, with stocks like Mcc Meili Cloud Computing Industry Investment hitting two consecutive limit ups. 4. The non-ferrous metals sector saw the most declines, with stocks like Willing New Energy, Shanjin International Gold, Zhongjin Gold Corp., Ltd., and Baowu Magnesium Technology falling. Institutional Views: Huatai: Geopolitical tensions and rising oil prices remain the main contradictions in market pricing. According to Huatai Research Institute's Chief Strategy Analyst He Kang, from the perspective of market trading structure and fund behavior, overall risk appetite has cooled down, with geopolitical tensions and rising oil prices remaining the main contradictions in market pricing. Looking ahead, in the macro aspect, short-term risks have not completely dissipated, global stagflation concerns are rising, domestic broad liquidity is abundant, but the sustainability of improvements in imports, exports, and inflation data needs verification. In the micro aspect, global investors still have concerns about the disruptive impact of AI, and the upcoming most important earnings season for A-shares will focus on verifying the consensus on the high prosperity of sectors like power grid equipment, optical fiber cables, and chemical industries with clear expectations of a cycle reversal in capacity. CICC: Expects the Fed to delay restarting rate cuts until the second half of the year. CICC pointed out that the Fed maintained interest rates unchanged at the March meeting, which was in line with market expectations. The dot plot and economic forecasts show an upward revision in inflation expectations and a narrowing of room for rate cuts, indicating an overall cautious policy stance. Although Powell believes that there is great uncertainty in oil price shocks and the economy still shows resilience, CICC believes that the actual situation is more complex. Tariffs and immigration policies have already constrained supply, combined with oil price shocks, the US economy is entering a phase of "stagflation." At the same time, private credit risks are emerging, and financial conditions may tighten spontaneously. In this context, the Fed is currently constrained by sticky inflation in the short term and may continue to maintain interest rates unchanged; in the medium term, as demand weakens or financial risks intensify, there will be passive pressure on the policy to shift towards rate cuts. It is expected that the Fed will maintain interest rates unchanged in the first half of the year, and the restart of rate cuts will be delayed until the second half of the year. However, if rate cuts are a passive response to a deterioration in economic or financial conditions, it will also be difficult to boost market risk appetite. China Securities Co., Ltd.: North America's power shortage is difficult to reverse, energy storage and grid construction will soon replicate the prosperity of gas turbines. Currently, the North American power system is facing issues like a long integration period, aging and retiring power/grid equipment, and insufficient backup capacity. The explosive demand for AI/DC will lead to a power deficit in the North American power grid reaching 39.9, 51.8, 67.8GW by 2026-2028. Gas turbines, energy storage, and grid equipment will become the core beneficiaries and their investment lines will gradually come into reality. The market currently only recognizes the prosperity of gas turbines, and it is expected that six months to a year later, grid investment and energy storage construction will continue to increase, with North America's profit volume far exceeding that of other regions globally, showing optimism in the elasticity of the relevant industrial chain. This article is reprinted from "Tencent Stock Selection." Editor: Wang Qiujia.