A-share market review | The market fluctuated and adjusted throughout the day, with the Shanghai Composite Index closing down 3.63% and barely holding above 3800. Nearly 5200 stocks closed in the red.

On March 23, the market fluctuated and adjusted throughout the day, with all three major indexes opening low and falling by over 4% during the day. The Shanghai Composite Index barely held onto the 3800-point level at the end of the day. Most individual stocks fell while few rose, with nearly 5200 individual stocks declining in the market, including 133 individual stocks hitting the limit down. By the close, the Shanghai Composite Index fell by 3.63%, the Shenzhen Component Index fell by 3.76%, and the ChiNext Index fell by 3.49%. The total turnover of the Shanghai and Shenzhen markets was 2.43 trillion yuan, an increase of 144.7 billion yuan compared to the previous trading day. What exactly happened to cause the bloodbath in the A-share market? Three major "ghost stories" have been identified: 1. The betrayal of gold: Gold prices plummeted. On March 23, spot gold fell below $4350, dropping by 3.54% during the day. Spot silver was at $65.14 per ounce, down by 4.02% during the day. A-share precious metals concepts fluctuated downwards, with Chifeng Jilong Gold Mining hitting the limit down. 2. The "Black Swan" event in the Middle East: The situation in the Middle East escalated suddenly over the weekend. U.S. President Trump threatened on Saturday that if Tehran did not fully reopen the Strait of Hormuz within 48 hours, the U.S. would "destroy" Iran's power plants. U.S. Treasury Secretary Mnuchin later stated, "Escalation before de-escalation." 3. Technical breakdown: The Shanghai Composite Index broke crucial support levels, causing a stampede of capital outflow. Market analysts believe that the Shanghai Composite Index's opening below 3900 points triggered programmed trading stop losses, leading to margin call liquidations and outflows of northbound funds causing a stampede. So, when will the market hit bottom? Goldman Sachs' Asia-Pacific Chairman Sneader expressed a "fairly optimistic" view of the South Korean market, with energy factors having a minimal impact on China. Deutsche Bank strategist Jim Reid reviewed the performance of U.S. stocks after 30 major geopolitical events and found that the S&P 500 usually hits its low point around 3 weeks after the event. Currently, the market is approaching this time window, with the median maximum pullback being around -6%. Reid also stated that the market typically recovers most losses within 34 days after the event. Independent research firm Variant Perception also believes that the market sentiment is about to change, with uncertainty reaching its peak in the coming days. The firm also pointed out that the recent simultaneous sharp declines in gold and stocks are signals of market "de-risking" and forced liquidations, usually indicating that the market bottom is near. Bank of America strategist Michael Hartnett pointed out that the market has not completely "surrendered" yet, but it is approaching a crucial moment. He believes that when approximately 88% of global stock indices simultaneously fall below their 50-day and 200-day moving averages, it is the best time to increase risk positions. The S&P has already reached this level, but global markets may need to drop another 3-5% to trigger a buy signal. Hartnett estimates that if oil prices fall below $100 per barrel, the market will have more confidence to add risk assets again. In terms of market performance, the coal sector defied the trend and strengthened, with Yunnan Coal & Energy and Liaoning Energy Industry hitting the limit up; oil and gas stocks surged, with BOMESC Offshore Engineering hitting the limit up; the space photovoltaic concept was active, with Hunan Huamin Holdings, Jiangsu Chint Power Technology, and OPT hitting the limit up; the power grid equipment and power stocks strengthened, with Huadian Liaoning Energy Development, Beijing Orient EcoEnergy, and Zhejiang Provincial New Energy Investment Group hitting the limit up; the chemical industry oscillated and rebounded, with Inner Mongolia Jinmei Chemical Technology hitting the limit up; some Siasun Robot & Automation concept stocks strengthened, with Kingfa Sci. & Tech. and Beijing Capital Development hitting the limit up. On the downside, the precious metals concept fluctuated downwards, with Chifeng Jilong Gold Mining and Sichuan Gold hitting the limit down; the computing hardware stocks experienced a collective pullback, with declines in optical modules, copper cable high-speed connections, Sanan Optoelectronics, and DELTON hitting the limit down; most AI application concept stocks weakened, with Northern United Publishing & Media, Beijing Quanshi World Online Network Information, and Heilongjiang Publishing & Media Holdings hitting the limit down; the tourism and hotel sector continued to decline, with Guangzhou Lingnan Group Holdings, Hubei Three Gorges Tourism Group, and Emei Shan Tourism hitting the limit down; the semiconductor chip industry chain showed weak trends, with Hunan Goke Microelectronics and Giantec Semiconductor Corporation falling by over 10%; the agriculture and farming concept fluctuated downwards, with Tianshui Zhongxing Bio-technology and Jinyu Bio-Technology hitting the limit down; the banking sector's decline expanded, with Jiangsu Zhangjiagang Rural Commercial Bank and Qingdao Rural Commercial Bank Corporation falling by over 5%. Additionally, the airport transportation, pharmaceutical and medical, and consumer electronics sectors performed poorly. Popular Sectors: 1. Precious metals sector downturn The precious metals concept fluctuated downwards, with Chifeng Jilong Gold Mining and Sichuan Gold hitting the limit down, and Zhongjin Gold Corp., Ltd., Shandong Gold Mining, and Western Region Gold following suit. 2. Active space photovoltaic concept The space photovoltaic concept was active, with Hunan Huamin Holdings, Jiangsu Chint Power Technology, and OPT hitting the limit up. 3. Coal sector defies the trend The coal sector defied the trend and strengthened, with Yunnan Coal & Energy and Liaoning Energy Industry hitting the limit up, and Shanxi Coking Coal Energy Group, Zhengzhou Coal Industry & Electric Power, and Pingdingshan Tianan Coal. Mining Co., Ltd. following suit. Institutional Views: 1. CITIC SEC: Some core disputes regarding the impact of the Middle East conflict will gradually be resolved after April CITIC SEC believes that some core disputes regarding the impact of the Middle East conflict will gradually be resolved after April. The answers to the core issues in the market will be gradually resolved in April. Prior to this, the market will still be in a narrative game stage, reflecting the characteristics of liquidity withdrawal. It is advised to firmly focus on the layout of China's advantageous pricing power in manufacturing. The current bottom-building suggestion still revolves around industries with advantages in market share, high costs of overseas capacity reset, and easily influenced by policy supply elasticity, based on new energy, chemicals, power equipment, and non-ferrous metals. 2. Huaxi: Waiting for more "market-stabilizing" policies to be issued Huaxi believes that last week, most global stock markets fell, with A-shares and European stock markets leading the decline. On one hand, the U.S.-Iran geopolitical situation remains unclear, with significant uncertainty about the subsequent trends in oil prices and inflation, increasing the tail risk of stagflation; on the other hand, the Federal Reserve's March interest rate meeting kept rates unchanged, but with a hawkish statement and not ruling out the possibility of rate hikes, sparking concerns in the market about a tightening U.S. dollar. Under the suppression of risk appetite, the overall market of A-shares retreated, with continuous shrinking turnover, reflecting a cooling sentiment in the market traded amidst rapid sector rotation. Structurally, defensive sectors such as food and beverage and banking, as well as high-liquidity sectors like storage, AI computing power, are relatively advantageous. 3. Huaan: When will the current benign adjustment end? Huaan believes that the risks of overseas tariffs continue to accumulate, Middle East tensions remain unresolved, inflation concerns have driven a noticeable hawkish shift in the Federal Reserve, and the probability of incremental policies being introduced due to stronger economic data in China is low. It is expected that the market will continue to maintain a weak and volatile trend. In terms of allocation, short-term dividend assets such as banks, utilities, and sectors with price increase catalysts like chemicals, mechanical equipment, storage, are likely to outperform, while growth styles remain unchanged as the core theme in the medium term, but are still in a period of adjustment in the short term. After the adjustment, the market is expected to enter the second phase of a profit-driven bull market rally, thus we refer to the current adjustment as a benign adjustment. This article is sourced from "Tencent Stock Selection," edited by Huang Xiaodong.