A-share midday review | CSRC speaks during trading hours, A shares move independently! ChiNext opened lower and rose by 0.83% in half a day.

On March 27, the morning market opened low and then rose, with all three major indexes turning red. By midday closing, the Shanghai Composite Index rose 0.26%, the Shenzhen Component Index rose 0.93%, and the ChiNext Index rose 0.83%. The total trading volume in Shanghai and Shenzhen reached 1.14 trillion yuan by midday, a decrease of 84.3 billion yuan compared to the previous trading day. So, what reasons allowed A-shares to resist the pressure of the external market and turn positive? From a news perspective, Cheng Hehong, the chief lawyer of the China Securities Regulatory Commission, stated at a forum during the Boao Forum for Asia Annual Meeting in 2026 that various medium and long-term funds significantly increased their market entry efforts in 2025. Social security funds, insurance funds, pension funds, public funds, and brokerage self-operated funds collectively bought more than 800 billion yuan worth of A-shares. In addition, with related funds buying equity funds and state-owned listed companies repurchasing shares, the actual new market entry scale of medium and long-term funds exceeded one trillion yuan. Furthermore, Jin Yao, the vice chairman of the National Social Security Fund Council, also stated at the same forum that the National Social Security Fund can maintain strategic resolve in short-term fluctuations and has decisively increased positions in A-shares during significant declines. In terms of market performance, the lithium battery industry chain saw another rise, with electrolytes and lithium salts leading the way. Chengxin Lithium Group and YOUNGY Co., Ltd. had boards frozen. Chemical stocks fluctuated higher, with Guizhou Chitianhua and Kingenta Ecological Engineering Group having boards frozen. The innovative pharmaceutical and medical service concepts continued to rise, with nearly 10 stocks hitting the limit. The non-ferrous metal concept showed collective strength, with multiple stocks hitting the limit. The consumer sector rebounded, with Ningbo Lehui International Engineering Equipment having its board frozen. Energy and power stocks were partially active, with Guangxi Energy and Jinneng Holding Shanxi Electric Power hitting the limit. The photovoltaic module concept showed strength, with TKD Science and Technology and Jiangsu Fasten having boards frozen. The military, commercial aerospace concepts rose, with Anhui Shenjian New Materials and Jianshe Industry Group hitting the limit. In terms of declines, the coal concept saw a minor decline, with Liaoning Energy Industry hitting the limit. Banks, insurance, and other sectors declined collectively. The port shipping sector also declined, with Rizhao Port Co., Ltd. and Liaoning Port dropping by nearly 5%. The photovoltaic equipment sector adjusted in early trading, with Jiangsu Chint Power Technology dropping by over 7%. The tourism hotel, oil and gas sectors showed weak trends. Looking ahead, Wang Han, the chief economist of Industrial, stated that strategically, A-shares should not be overly pessimistic as they have clear support. Tactically, investors should face the increasing market volatility and adhere to a contrarian strategy to avoid blindly chasing high prices. Popular sectors: 1. Chemical sector is active; companies like Suli Co., Ltd., Shan Dong Lu Bei Chemical, and Kingenta Ecological Engineering Group had boards frozen. 2. Pharmaceutical sector is strong; companies like Beijing Scitop Bio-tech and Ningbo Menovo Pharmaceutical had strong performances. 3. Lithium mining concept is booming; companies like YOUNGY Co., Ltd., Jiangxi Special Electric Motor, and Chengxin Lithium Group had boards frozen. Institutional views: Industrial: A-shares should not be overly pessimistic, have clear support The ongoing Middle East conflict, increasing global commodity market volatility, and the focus on energy supply security, inflation expectations, and asset allocation direction are key considerations for investors. Wang Han, the chief economist of Industrial, stated that strategically, A-shares should not be overly pessimistic as they have clear support. The certainty of China's medium to long-term economic development provides solid support to the market; domestic market regulation and macroeconomic decisions prioritize market stability, making A-shares a stabilizing force. Although the U.S. containment of China's development remains a core external constraint, the U.S. is facing challenges in the Middle East, creating a more favorable strategic environment for China. Tactically, investors need to face the increasing market volatility and adhere to a contrarian strategy. Capital markets naturally dislike risks, with A-shares being particularly sensitive to this. In the short term, if the U.S. intensifies military actions against Iran, deploys ground forces or disrupts oil shipments in the Strait of Hormuz, investors with short-term liabilities will seek safe havens first. As the geopolitical situation remains deadlocked for months, institutional investors will also become more cautious. In the short term, Iran does not have tactical advantage yet, the U.S. is likely to achieve some tactical gains, so a contrarian strategy is advisable to avoid blindly chasing highs. Huaan: Current market faces ongoing external disturbances The ongoing U.S.-Iran conflict shows no signs of easing, with Trump postponing his visit to China, indicating continued overseas disturbances in the short term. The rise in oil prices and resulting inflation concerns, along with a generally hawkish stance at the March FOMC meeting and the potential for future rate hikes, indicate that the current market continues to face external disturbances. In the first benign correction period of the economic cycle, major industries and representative stocks usually go through a three-stage process of "decline rebound decline," with wide fluctuations. The strong leadership shown by growth representative stocks and the communication industry in the recent market downturn may represent the middle phase of the rebound process. We believe that representative growth stocks and the communication sector may still see a "final decline" before consolidating the foundation for a new round of uptrend. Orient: Market's shrinking adjustment trend is a second bottoming Orient stated that the current geopolitical tensions prompt the reevaluation of the energy system and reshaping of the global energy allocation model. Future energy policies are likely to shift towards "self-controllable + diversified alternatives." From an A-shares investment perspective, new energy generation, energy storage, and power grid equipment are benefiting and worth continued attention from investors. From a technical perspective, the market's shrinking adjustment trend signals a second bottoming, with the Shanghai Composite Index likely to see a minor rebound near 3850 points.