【Afternoon Report】The three major indices surged then pulled back, closing slightly lower, while the lithium battery industry chain defied the trend with a breakout.

Ask AI · Lithium battery materials stocks strengthen against the trend—what bullish catalysts are behind it?

I. 【Morning market review】

Caixin Media, March 26: In the early trading session, the market surged and then pulled back, with the STAR Market 50 index falling by more than 1%. The half-day trading volume on both Shanghai and Shenzhen markets was 1.22 trillion yuan, down by 242 billion yuan compared with the previous trading day. In terms of market themes, rotation among sector hotspots was weak, and more than 4,100 stocks in the entire market declined. By sector, lithium battery material stocks such as electrolytes, separators, and lithium mines were active. Rongjie Co., Ltd. hit the daily limit for the third consecutive time; Shida Shenghua, Datongnan, and FoSu Technology all closed at the daily limit. Meanwhile, computer-power hardware stocks remained strong: Minpu Optics and Magnetics delivered 6 trading days and 3 consecutive limit-ups; Yuanjie Technology, Changfei Optical Fibers, and Zhili Fang all reached new intraday highs. The power sector bottomed out and rebounded: Huadian Liaoning achieved a 9-day limit-up streak; Hunan Development, Ganeng Co., Ltd., Guangxi Energy, and Shen’nan Electric A all hit the daily limit. On the downside, grid equipment stocks adjusted; Shunna Co., Ltd., Jinali Huadian, ZeYu Intelligent, and others led the declines. By the close, the Shanghai Composite Index fell 0.58%, the Shenzhen Component fell 0.38%, and the ChiNext fell 0.07%.

Looking at individual stocks, today in the morning session there were 36 stocks hitting the daily limit (excluding ST and newly listed shares that had not yet opened). The board-closing rate was 73%. The number of stocks with consecutive limit-ups was 9: Huadian Liaoning recorded 9 consecutive limit-ups; Xinneng Taishan, Hunan Development, Rongjie Co., Ltd., and Meinuohua had 3 consecutive limit-ups; China Railway Materials, Minpu Optics and Magnetics, Min’ming Energy, and Bohai Chemical had 2 consecutive limit-ups.

Lithium battery sector stocks led the gains: Shida Shenghua hit the daily limit; Haike Xinyuan and Sinrui Co., Ltd. rose by more than 10%; stocks such as Huasheng Lithium, Tianshi Shares, and Putailei also led the gains. On the news front, according to Xinlu Information, in March the production scheduling of domestic battery sample enterprises increased by 21.93% month-over-month. For cathodes and anodes, they rose 23.3% and 16.42% month-over-month, respectively; for separators and electrolytes, they increased 8.7% and 18.78% month-over-month, respectively. Institutions expect that in April, month-over-month production scheduling will also rise significantly. The price of lithium carbonate shows a “weak off-season but not weak” pattern—overseas supply disruptions combined with a front-loaded domestic demand break the traditional off-season downward trend, and industry sentiment is expected to improve.

Computer-power hardware stocks remained strong: Minpu Optics and Magnetics achieved 6 trading days and 3 consecutive limit-ups; Zhili Fang, Changying Tong, Luobotoke, Tianfu Communications, Juguang Technology, and other stocks led the gains. Yuanjie Technology continued to set new highs, with its market value surpassing 100 billion yuan.

On the news front, Luobotoke announced that its wholly owned subsidiary ficonTEC and its subsidiary signed, together with a company F listed on Nasdaq and its subsidiaries, during the period from March 19, 2026 to March 25, 2026, major contracts for day-to-day business with a cumulative amount equivalent to about 600 million yuan. LightCounting predicts that the CPO market size in 2030, including Scale-up and Scale-out scenarios, is expected to reach $10 billion; Coherent (COHR.US) further raised its forecast to $15 billion at the OFC conference.

Chemical stocks saw a partial rebound: Datongnan, Xinghua Shares, FoSu Technology, Yuanli Technology, and Bohai Chemical all hit the daily limit; Songjing Shares, Guotai Group, Jia Heng JiaHua, and others posted gains.

On the news front, local time on Wednesday, BASF, a global chemical giant, announced that due to cost increases caused by the war between the US and Iran, the company would raise prices for more products. BASF announced that in the European region, it will raise prices for its basic amine product portfolio, with increases up to 30% for some products; the price hikes for certain products may be even higher.

The power sector bottomed out and rebounded: Huadian Liaoning achieved a 9-day limit-up streak; Hunan Development, Ganeng Co., Ltd., Guangxi Energy, and Shen’nan Electric A all hit the daily limit.

On the news front, the National Energy Administration released national power statistics for January to February 2026. As of the end of February, the country’s cumulative installed power generation capacity was 3.95 billion kilowatts, up 15.9% year over year. An institutional research note pointed out that ongoing geopolitical conflicts in the Middle East continue to push up international oil and gas prices, highlighting systemic risks in the traditional energy system and accelerating the clean-energy transition of the energy mix. Headwinds for green electricity—“utilization + electricity price + subsidies”—are gradually easing. With new energy moving into the market comprehensively, high-quality development is being promoted. Green electricity, energy storage, and other areas are strengthening against the tide, and industry sentiment continues to improve.

Overall, looking at today’s early session: stocks surged and then pulled back, and all three major indices turned green again, with trading volume shrinking significantly. Among them, the entire lithium battery industry chain strengthened across the board, with sub-sectors such as electrolytes, separators, and lithium mines also leading the gains; the computer-power hardware direction likewise maintained strength. The power stocks bottomed out and rebounded, and Huadian Liaoning advanced to a 9-day limit-up. On the other hand, the leaders in declines included grid equipment, insurance, and defense and military industry. Overall, after two consecutive days of broad gains, it is reasonable that the market again differentiated and adjusted. Going forward, investors may still focus on contrarian/against-the-tide names.

Midday limit-up analysis chart

II. 【Market news highlights】

1、Google rolls out compression algorithm TurboQuant, claiming about 6x memory savings

Google recently launched a compression algorithm called TurboQuant that could reduce the memory requirements of AI systems. According to Google, TurboQuant’s compression technique is designed to reduce memory consumption for large language models and vector search engines. The algorithm mainly targets the key-value cache bottleneck used in AI systems to store information for high-frequency lookups. As the context window gets larger, these caches are becoming the primary memory bottleneck. TurboQuant can compress the key-value cache to 3-bit precision without retraining or fine-tuning the model, while basically keeping the model’s accuracy unaffected. Tests on open-source models including Gemma and Mistral show the technique can achieve about 6x memory compression of key-value caches. In addition, test results on NVIDIA H100 accelerators show that compared with unquantized key vectors, the algorithm can achieve up to an 8x performance improvement. Researchers also said that the application of this technology is not limited to AI models, but also includes vector retrieval capabilities that support large-scale search engines. Google plans to demonstrate TurboQuant technology at the International Conference on Learning Representations (ICLR 2026) in April.

2、Eurasian cooperation “smiling satellite” completes launch-site final preparations; planned to launch April 9

From the Chinese Academy of Sciences, in March 2026, the SMILE, or Solar wind—Magnetosphere Interactions Global Imager (SMILE; commonly known as the “smiling satellite”), developed jointly by the Chinese Academy of Sciences and the European Space Agency (ESA), completed all pre-launch preparations at the launch center in Kourou, French Guiana. It has already completed the spacecraft-to-rocket docking with the Vega-C launch vehicle’s integration ring. The satellite is planned to launch at local time on April 9 (afternoon of April 9 Beijing time), and the mission has entered the final countdown stage for launch.

(Caixin Media)