A-share closing review | Massive volatility in index trading volume! Who says only standing in the light can be a hero? "Old-established stocks" such as Baijiu rebounded.

On April 23, the three major A-share indexes opened high, fell back, and then rose again, with significant trading volume. By the close, the Shanghai Composite Index fell 0.32% to below 4100 points, the Shenzhen Component Index fell 0.88%, and the Growth Enterprise Index fell 0.87%. Trading volume increased significantly, with a total turnover of 2.8 trillion RMB in the Shanghai and Shenzhen markets, an increase of 244.7 billion RMB compared to the previous trading day. In terms of market performance, the market was chaotic with nearly 4100 stocks declining. Defensive sectors were strong, with white liquor and retail concepts in the consumer sector showing strength, leading to Anhui Yingjiagongjiu, Zhongxing Shenyang Commercial Building Group hitting the limit up. The green energy concept quickly rose, with Huadian Liaoning Energy Development hitting the limit up for three consecutive days, and CECEP Wind-Power Corporation, Green Development Electricity Group of Tianjin also hitting the limit up, while Guangdong Electric Power Development touched the limit up. The oil and gas concept rose rapidly, with Shandong Molong Petroleum Machinery hitting the limit up. The computing power leasing concept was active again, with Lotus Holdings, Nanjing Canatal Data-Centre Environmental Tech hitting the limit up. The gas turbine concept was active, with Liaoning Fu-An Heavy Industry hitting the limit up and Anhui Yingliu Electromechanical hitting a record high. On the downside, the non-ferrous metal sector adjusted, with XIZANG ZHUFENG RESOURCES, China Rare Earth Nonferrous Metals hitting the limit down, and Hunan Silver, Yunnan Tin Co., Ltd., and Guangdong Xianglu Tungsten all declining. In terms of individual stocks, the leading light module company Zhongji Innolight rose over 3% at one point and closed up over 1%, becoming the second computing hardware stock to surpass a market value of 1 trillion RMB after Foxconn Industrial Internet, with a cumulative increase of over 900% since April 22 last year. According to 21st Century Business Herald, the logic supporting the market's upward trend is gradually becoming clear: on the one hand, with external disturbances fading, the market's focus will return to fundamentals, and A-share earnings growth is expected to improve; on the other hand, the valuations of major indices are still relatively low globally, and the steady influx of incremental funds through wealth management funds, ETFs, etc., will provide support for the second quarter. In this context, resource stocks, technology sectors, and cyclical industries are considered key areas for investment. At the same time, whether foreign capital will flow back into A-shares has become another major focus. In the current global turbulence, A-shares have shown significant independence and resilience, highlighting their continued attractiveness for global investors. This is supported by China's stable economy, energy independence, and complete industrial chain, which provide a "safety premium". Looking ahead, Changjiang predicts that once the impact of conflicts on A-shares diminishes, the increase in risk appetite may help push A-share indices to break previous highs in the second quarter. Hot sectors 1. Green energy concept stocks show unusual movements In the afternoon, the green energy concept showed unusual movements, with power and energy combination leading the way, and Jinko Power Technology hitting the limit up. Previously, Huadian Energy hit the limit up, and Green Development Electricity Group of Tianjin, Hunan Junxin Environmental Protection, China Suntien Green Energy Corporation, China Southern Power Grid Energy Efficiency & Clean Energy, and Guangdong Electric Power Development followed suit. Review: On the news front, the Central Committee of the Communist Party of China and the State Council's Office released "Opinions on Doing Energy Conservation and Carbon Reduction Work at a Higher Level and with Higher Quality". The opinions require accelerating energy savings in digital infrastructure. In addition, Jinko Power Technology announced that it has signed an agreement with the Zhongwei Municipal Government to build a 1GW computing power center project with a total investment of approximately 24.5 billion RMB, planning to deploy around 50,000 cabinets in three phases. 2. Liquor sector rebounds after shaking The liquor sector was active in the morning, with Anhui Yingjiagongjiu hitting the limit up, and Hebei Hengshui Laobaigan Liquor, Shanxi Xinghuacun Fen Wine Factory, Anhui Gujing Distillery, Jiangsu King's Luck Brewery Joint-Stock following. Review: On the news front, Anhui Yingjiagongjiu released its first-quarter report for 2026, with total operating income of 2.23 billion RMB, up 8.91% year-on-year from the same period last year, and a net profit attributable to the parent company of 835 million RMB, up 0.73% year-on-year from the same period last year. 3. Gas turbine concept is active The gas turbine concept was active in the morning, with Liaoning Fu-An Heavy Industry hitting the limit up, climbing for six days and hitting a historical new high, while Anhui Yingliu Electromechanical touched the limit up. Review: On the news front, overnight, U.S. energy equipment manufacturer GE Vernova reported a 96% increase in first-quarter profits, with orders reaching 18.3 billion USD, a 71% year-on-year increase, leading to a 13.75% surge in stock price to a record high, with a market value surpassing 300 billion USD. Institutional Views Changjiang: Impact of conflicts is waning, A-shares may break previous highs Changjiang's Chief Strategy Analyst Dai Qing pointed out that with the gradual opening of the Strait of Hormuz and the peak oil prices falling, the "second derivative" of market pessimism has reached a turning point. As the impact of conflicts on A-shares gradually diminishes, the increase in risk appetite may help push A-share indices to break previous highs in the second quarter. As external disturbances fade, market focus is expected to return more to fundamentals. Dai Qing believes that the overall impact of conflicts on A-share earnings is limited, and structurally, upstream resources, security-related areas (such as new energy, machinery, and defense) and export chain industries are expected to benefit, with no necessarily downward revision in annual earnings. UBS Securities: A-share earnings growth is expected to further improve compared to last year UBS Securities' China Stock Strategy Analyst Meng Lei expressed a more optimistic view, stating that A-share earnings growth is expected to further improve compared to last year. The core reasons include three aspects: first, the year-on-year turn positive in March's PPI, with non-financial enterprises' revenue closely related to PPI, leading to accelerated profit growth. Coupled with strong performance in the financial sector, it will drive faster earnings growth for the entire A-share market; second, significant improvement in industrial enterprise profits in January-February, with industrial sector profits expected to achieve double-digit growth in the first quarter for A-share companies; third, significant upward revisions in profit expectations for the Shanghai and Shenzhen 300 index recently, similar to the performance in recovery years such as 2017, 2019, and 2021. Therefore, UBS tends to judge that the current A-share market is in an environment of comprehensive and widespread upward revisions in profit expectations. Huajin Securities: Market may be relatively strong in April to May Huajin Securities' Chief Strategy Analyst Deng Lijun analysis suggests that the market may be relatively strong from April to May. In April, progress in US-Iran negotiations may ease tensions, combined with economic and fundamental support, the market may experience a recovery. In May, if geopolitical risks further diminish and with the possibility of Trump visiting China, risk appetite may continue to rise. After entering June, the progress of the US midterm party primaries may increase Sino-US strategic risks, while changes in US inflation data may disturb liquidity expectations, leading to increased market volatility. Cathay Haitong Securities: China's stock market is far from ending its upward trend Looking ahead, the upward trend of China's stock market is far from over, and the Chinese stock market is expected to reach new highs in the future. Firstly, after 2024, concerns over "internal strains" have decreased, and the overseas disturbances in 2026 are also an important turning point, reflecting China's industrial advantages. Whether in technological progress or the global direction of manufacturing, the international community will reassess and re-evaluate Chinese assets. Secondly, the appearance of risk boundaries and constraints signals a relaxation in the market's suspended states, with the expectation cuts largely ending, and the market returning to internal development logic. The recent acceleration of a new round of capital market reforms implies a policy attitude that solidifies the stable and positive trend of the capital market. The clarification of the bottom is expected to strengthen the background for the sinking of risk-free returns in the current scenario of rising social asset management demand and the influx of incremental funds into the market. Thirdly, fiscal efforts in 2026 have fueled rising inflation trends, traditional industries are gradually stabilizing; aimed at the huge market demand and the significant gap in computing power between China and the US, investments in China's emerging industries will also accelerate; in addition, China's competitive manufacturing industry is going global, multinational companies are emerging, and ROE is improving, leading to an upward revision in growth expectations for China in 2026. The Chinese stock market will not stop here, so keep the confidence. In terms of allocation, emerging technology is the main theme, and value will also have its day. This article was republished from "Tencent Self-selected Stocks" with an editorial edit by GMTEight, edited by Jiang Yuanhua.