Shanghai Composite Index Falls 2.5% as Coal and Helium Concepts Rise Against Trend, Precious Metals Sector Plummets

The three major Chinese stock indices all fell more than 2%. On the market, coal, helium concept, oil service engineering, photovoltaic equipment, passenger cars, and energy metals performed countertrend and strengthened. Gold, under-screen cameras, feed, tourism and scenic spots, aquaculture, genetically modified organisms, and hotel and catering sectors underperformed, leading the market decline.

At midday, the Shanghai Composite Index dropped 2.50% to 3,858.18 points; the Shenzhen Component Index fell 2.53% to 13,515.13 points; the ChiNext Index declined 2.44% to 3,270.16 points; the STAR Market 50 Index decreased 2.89% to 1,280.24 points; the Beijing Stock Exchange 50 Index dropped 2.95% to 1,277.28 points. A total of 486 stocks rose, while 4,977 declined, with 36 stocks hitting the daily limit. The total trading volume for the two markets in the first half of the day was 1,459.6 billion yuan.

Today’s Highlights

The Iranian Ministry of Foreign Affairs issued a statement on the 22nd, stating that the Strait of Hormuz has not been blocked. Under the necessary measures taken due to the war situation, ships can still continue to navigate through the waterway. The statement also outlined Iran’s principles regarding shipping and navigation safety in the Strait of Hormuz.

Recently, the Shanghai Stock Exchange accepted the IPO application of Yushu Technology Co., Ltd. on the STAR Market, with a proposed fundraising of 4.202 billion yuan. According to incomplete statistics, 19 A-share listed companies including Shiyi Da, Zhongke Chuangda, Jingxing Paper, Jinfang Technology, Huayuan Holdings, Langke Intelligence, Xing Shuai Er, Shoukai Shares, Jinggong Technology, Zhejiang Media, Shenxinfu, Seven Wolves, Yayu Shares, Volkswagen Public Utilities, Wolong Electric Drive, Zhongji Xuchuang, Mars People, China News Group, and Snow Dragon Group have responded on platforms like Interactive Easy about their investments in Yushu Technology. On March 12, Shiyi Da indicated on the platform that the company indirectly holds shares in Yushu Technology.

Since March, over 50 companies have responded on investor relations platforms regarding the impact of external factors. Overall, more than 10 companies said the Middle East geopolitical conflict has affected their business, with both positive and negative effects; nearly 30 companies reported minimal impact; the rest, including Sichuan Jiuzhou, Satellite Chemical, Jianlin Home, Sirui Pu, and others, reported no impact.

On March 22, Pan Gongsheng, Governor of the People’s Bank of China, delivered a keynote speech at the China Development High-Level Forum 2026, stating that China will continue to implement moderately loose monetary policy. By using a combination of reserve requirement ratios, policy interest rates, open market operations, and other tools, liquidity will remain ample. Currently, China’s social financing conditions are relaxed, and the total financial volume is growing reasonably.

Institutional Views

Galaxy Securities: The trend of crude oil prices under geopolitical conflicts will remain a key variable influencing recent market structure

Galaxy Securities’ research report states that the duration and evolution of geopolitical conflicts remain highly uncertain. Disruptions to global risk assets are unlikely to subside in the short term, and global equity markets are expected to continue high volatility. However, the downside space for A-shares is relatively limited, and the market is likely to digest external pressures through oscillation, differentiation, and sector rotation. Regarding structure, market focus is on inflation logic, with crude oil price changes under geopolitical conflicts still being a key factor affecting recent market structure. Investment focus includes: 1) The ongoing escalation of US-Iran conflicts, which directly drives energy and alternative demand, focusing on coal chemical, coal, shipping ports, oil and gas sectors. 2) The recent sharp correction in non-ferrous metals, with attention to valuation and cost-effectiveness after the pullback. 3) A shift towards defensive assets such as finance, utilities, and transportation. 4) Technology innovation sectors, including power equipment, new energy, energy storage, semiconductors, computing power, and communication equipment. Additionally, the valuation of consumer sectors is at historically low levels, with some segments showing potential for recovery, such as agriculture, forestry, animal husbandry, food and beverages, and household appliances.

Caixin Securities: The market is likely to fluctuate widely from after the Spring Festival to the end of April

Caixin Securities notes that recent macro events abroad have increased uncertainties. “Stagflation-like” trading has warmed up, but a trend rally still awaits. From after the Spring Festival to the end of April, the market is likely to fluctuate broadly, with increased volatility. It is recommended to control positions reasonably and wait for signs of a market turning point. Investors can consider buying low in high-dividend assets, “HALO trading” concepts, policy favorable sectors, and high-growth technology stocks.

CITIC Construction Investment: Favor industries benefiting from long-term high oil prices, such as new energy and energy storage

CITIC Construction Investment’s research report believes that with the sharp rise in global energy prices and suppressed consumption, sectors that could be significantly impacted include high-valuation stocks, high-energy-consuming industries (oil consumption), and demand-reduction cost-increasing sectors. Favorable sectors include: 1) industries benefiting from the closure of the Strait of Hormuz and sustained high oil prices, such as coal chemical, new energy, energy storage, nuclear power, and power grids; 2) defensive stocks with stable cash flow, like coal and hydropower; 3) certain growth stocks that may be misjudged, such as AI supply chain and power shortage chains.

CITIC Securities: Continue to be optimistic about storage demand exceeding expectations, with supply expected to remain tight until the end of 2027

CITIC Securities’ research states that driven by AI demand, storage remains in the early to mid-stage of a super cycle, with supply and demand expected to remain tight until at least 2027. Since February, with Kioxia’s earnings and guidance exceeding expectations, NAND contract prices rising in Q1, and leading domestic module manufacturers reporting better-than-expected results from January to February, the high level of industry prosperity is further confirmed. The firm continues to favor storage demand exceeding expectations, with supply and demand expected to last until late 2027. Key recommendations include: 1) storage module companies with strong short-term performance; 2) storage design companies, especially those close to original manufacturers.

Huaxi Securities: Expect some structural opportunities in Hong Kong stocks in the near future

Huaxi Securities points out that within the current Hong Kong stock market, different assets are still quite differentiated. In the near future, some assets with smaller gains last year, limited external influence, upward industry trends, and better fundamentals may present structural opportunities.

招商证券: A-shares are in the latter stage of correction, with limited room for further sharp decline

According to technical and sentiment indicators, A-shares are in the latter part of this round of decline. Further sharp drops are limited, but external shocks could still trigger phase volatility. Confirming the bottom requires time and space. The key signal for a bottom is when the market stabilization mechanisms take substantive action. After the correction ends, core allocation directions include: resource stocks—benefiting from continued geopolitical premiums and domestic replenishment demand; AI infrastructure—driven by policy and industry trends, including computing power, data centers, and power support; and new energy—supported by long-term policies and demand growth under the “14th Five-Year Plan” energy transition goals.