A-share market closing analysis: Ceasefire expectations dashed! Indexes collectively decline, Shanghai index falls below 3900 points again

Today, the market saw a decrease in trading volume and a collective decline in the three major indices, with the Shanghai Composite once again falling below 3900 points. The market's total turnover was 1 trillion, a decrease of nearly 200 billion from the previous trading day, with over 4700 stocks in both markets falling. So, what was the reason for the A-shares to decline again today, with the Shanghai Composite falling below the 3900 points mark? Analysis reveals that the market is facing three unfavorable factors: Firstly, the Middle East geopolitical conflict has heightened risk aversion sentiments. Market analysis suggests that last night and this morning, the situation in the Middle East showed signals of unexpected deterioration (such as Trump's statement of increasing attacks on Iran), directly leading to a spike in oil prices. This panic sentiment quickly spread to A-shares, causing foreign and institutional funds to "run first in respect," directly crushing the fragile high opening pattern in the morning. Secondly, today is the last trading day before the Qingming small holiday. Faced with the uncertainty of a 4-day market closure, on-site funds chose to realize gains at high prices for safety rather than continuing to attack above 3900 points. Thirdly, some market analysts have pointed out that from the perspective of the market structure, the area above 3900 points is a heavy trapped area from the previous period. After the morning high opening touched this area, the sell-off by trapped and profitable stocks formed a joint force. With multiple factors resonating, this eventually led to the situation of "index turning green, stocks falling collectively." Looking at the market, the optical communication industry chain rose against the trend. Companies like Dagguang, Xiaoguang, and Xinguang all rose, as well as Zhongji Innolight and Eoptolink Technology Inc., while stocks like Wuxi Taclink Optoelectronics Technology and Suzhou Everbright Photonics surged, reaching historical highs. It is worth noting that in the fiber optic sector, two leading stocks, Hengtong Optic-Electric and Yangtze Optical Fibre And Cable Joint Stock, also surged to historical highs. In terms of news, at the policy level, the Ministry of Industry and Information Technology first mentioned "computing power bank" and "computing power supermarket," reducing the threshold for small and medium-sized enterprises to use algorithms; at the industry level, the latest data shows that the rental price of Nvidia's H100 one-year term has rebounded by nearly 40% to $2.35 per hour since its low point in October last year. In overseas markets, the optical communication industry chain surged collectively, with the leading stock Lumentum soaring and reaching a new high in intraday stock price. In terms of other hotspots, the market sentiment was extremely weak, and thematic concepts fell across the board. The Siasun Robot & Automation concept was active, with Huarui Electrical Appliance and Jiangsu Rongtai Industry hitting the limit up, while cross-border payments, CIPS, and diversified financial concepts also saw some performance. On the downside, the coal, chemical, oil and gas, and power resource sectors all plunged, with stocks like Fujian Minfa Aluminium Inc., and Fujian Mindong Electric Power Group hitting the limit down; the gold, minor metals, and non-ferrous metals concepts also continued to decline. Looking at individual stocks, there were 716 gainers and 4746 decliners in the two markets, with 35 stocks hitting the limit up. There were 39 stocks hitting the limit down. At the close, the Shanghai Composite fell by 1.00% to 3880.10 points, with a turnover of 713.8 billion yuan; the Shenzhen Component fell by 0.99% to 13352.90 points, with a turnover of 939.4 billion yuan. The Growth Enterprise Index fell by 0.73% to 3149.60 points. Capital Trends Today, the main funds focused on the acquisition of communication equipment, diversified finance, and automation equipment sectors, with the top stocks for net inflows including CNPC Capital, Zhongji Innolight, and Hengtong Optic-Electric. News Review 1. Apple hoards mobile DRAM at high prices, affecting MediaTek and Samsung According to reports, Apple is hoarding all available mobile DRAM in the market at extremely high prices in order to prevent competitors from obtaining enough chips. This strategy has already achieved some success: MediaTek and Qualcomm have both reduced production of 4-nm chips, resulting in a decrease of 15 to 20 million mobile chips supplied, significantly affecting the mid-to-low-end smartphone market; Samsung has also raised prices for multiple tablets and smartphones in Korea, indirectly reflecting the pressure on chip costs. 2. Comprehensive enhancement of mobile power source safety, mandatory national standards issued On April 3, 2026, the mandatory national standard "Safety Technical Specifications for Mobile Power Sources" was publicly released and will be implemented on April 1, 2027. The new standard puts forward several requirements to further enhance the safety level of mobile power products, including power banks. It specifies the improvement of the safety protection capabilities of mobile power sources in scenarios like high temperatures, overcharging, and squeezing; adds lithium exudation detection after cyclic aging, reducing the risk of internal short circuits after long-term use of mobile power sources. 3. Trump threatens again: will strike bridges and power plants in Iran US President Trump claimed on social media on the evening of the 2nd that the US military "has not yet begun to destroy what remains of Iran," and will strike bridges and power plants in Iran next. Trump had earlier posted a video on social media on the 2nd, claiming that airstrikes destroyed Iran's "largest bridge," pressuring Iran to "reach an agreement" with the US. Iranian Foreign Minister Araghi responded by stating that destroying civilian facilities would not force Iran to surrender. Previously, Trump had repeatedly threatened to destroy Iran's power plants and other facilities. Future Market Judgment 1. Guotai Haitong: Market corrections are opportunities, recommend active deployment Guotai Haitong's Chief Strategy Analyst Fang Yi believes that after the market correction, do not panic, as the Chinese stock market is experiencing an important bottom and trigger point. Market corrections are opportunities, so it is recommended to actively deploy. Comparing industries, finance and stability remain the top choices, and Chinese technology manufacturing and stable domestic demand are favored. 2. Huatai: Dividends still have bottom-line value In recent years, with the rise in global macroeconomic uncertainty and the growth in asset allocation demand of domestic residents and the decline in the overall social broad investment return rate, dividend strategies are increasingly being taken seriously by funds; currently, dividends are relatively undervalued compared to growth, and with the disruption in market risk appetite due to the Middle East situation, dividends still have bottom-line value. 3. CITIC SEC: Innovative drug industry enters a dense data catalytic period, recommended to focus on CITIC SEC's research report indicates that since 2026, the trading volume of Chinese innovative drugs has exceeded expectations, and the industry's global competitiveness has further improved; the domestic market is rapidly expanding, with top innovative drug companies experiencing rapid revenue growth with new products driving the growth. Recent upcoming international academic conferences will bring a dense period of data catalysis for many innovative drug pipelines. The global value of the innovative drug industry is highlighted, and it is entering a dense period of data catalysis. Recommendations include focusing on: 1) Top innovative drug companies are expected to see performance releases; 2) Core pipelines are about to see heavy data catalytic readouts; 3) Globally promising pipeline assets are expected to accelerate internationalization. In summary, the "stronger than the broader market" rating for the innovative drug industry is maintained. This article is reprinted from "Tencent Stock Selection", GMTEight Editor: Liu Jiayin.