Top 10 Institutions Discuss the Market: External Disturbances May Gradually Weaken, Market Performance Worth Expecting

This week, the Shanghai Composite Index fell 0.93%, the Shenzhen Component Index dropped 2.22%, and the ChiNext Index declined 2.45%. How will the A-share market perform next week? We have summarized the latest investment strategies from major institutions for investors’ reference.

Everbright Strategy: External Disruptions May Gradually Weaken; Market Performance Worth Expecting

External disturbances may gradually diminish, making market performance worth looking forward to. Although conflicts in the Middle East remain highly uncertain, the sentiment impact on the domestic market may have already passed its peak, and the market may soon return to its own rhythm. Currently, the “Two Sessions” have set a steady tone, which could lay a solid policy foundation for stock market gains. Additionally, the next month will be a period of intensive data releases and policy verification. Overall, opportunities in the equity market still outweigh risks, and performance is promising. Structurally, focus on hot topics, with short-term attention on Middle East tensions, and medium- to long-term focus on growth and pro-cyclical sectors. Due to Middle East conflicts, short-term safe-haven assets and commodities may perform well. In the medium to long term, focus on growth sectors benefiting from sustained industry heat and increased risk appetite in spring markets, such as humanoid robots and AI. Pro-cyclical sectors will benefit from strong commodity prices and policy support, especially in resource-related and offline service areas with potential for continued price increases.

China Galaxy Strategy: From the “14th Five-Year Plan” to 2026, A-share Market May Experience Volatility with Main Lines Emerging

Early-week sharp fluctuations in A-shares are not a trend reversal but a short-term emotional release under external pressure. The medium- to long-term upward trend remains intact, gradually shifting from “emotion-driven” to “fundamentals-driven,” characterized by “oscillations, increasing momentum, and focused structure.” On one hand, the 2026 government work report emphasizes domestic demand, cultivating new growth drivers, and technological self-reliance, which supports structural opportunities. The upcoming release of the “14th Five-Year Plan” outline will provide a clear long-term investment direction, encouraging capital to flow into strategic high-quality sectors. On the other hand, the intensive disclosure of 2025 annual reports and 2026 Q1 reports will be key anchors for the next phase, with stocks exceeding earnings expectations likely attracting capital.

GF Strategy: U.S.-Iran Tensions and Post-Two Sessions Market Outlook

In the medium term, visibility and predictability of the situation are increasing. First, U.S. stock valuations are close to their tech bubble peaks, with resilient long-term U.S. Treasury yields, and both stocks and bonds are highly sensitive to global inflation expectations. Second, obstacles to U.S. rate cuts will further impact the economy, affecting AI industry financing costs, consumer credit, and mortgage rates, thus restraining aggregate demand. Third, referencing the 1990s tech bubble burst, where oil price hikes triggered by conflicts led to Fed rate hikes, tech valuation compression, and U.S. market declines, the impact was profound. Fourth, in December 2025, Trump indicated that the midterm election focus would be on “prices,” with Republicans emphasizing “living costs.” The ongoing war situation may not be sustainable before the U.S. midterms. The logic of a global non-U.S. asset bull market in 2026 is unlikely to be overturned by geopolitical tensions. We remain optimistic about Chinese stocks, expecting a “Davis double play” with non-U.S. markets. Once short-term geopolitical risks subside, the market may present the year’s best bottom-fishing opportunity.

Shenwan Hongyuan Strategy: Transition from “First Phase Upward” to “Range Oscillation”

The resonance of U.S.-Iran conflict and “HALO trading” forms the core of short-term market dynamics. Current mainstream expectations for these factors do not extend to the medium term. While concerns about ongoing short-term disruptions exist, the inevitability of medium-term hedging factors is often underestimated. It is not yet time to adjust medium-term outlooks. The market remains in a transition from “first phase upward” to “oscillating within a range,” with short-term shocks likely just triggers. The key during this “two-phase rise” is to wait for earnings and time to digest valuations, for cyclical improvements, and for industry trends to advance across stages, with increased allocation to equities. The market is more focused on reality: visible growth opportunities still offer excess returns, while sectors lacking new catalysts may see continued weakness.

Hua Jin Strategy: Has the Spring Market Ended?

Currently, the spring rally in A-shares may still continue in the short term. (1) Short-term policies remain supportive, and external risks may ease marginally. First, domestic policies are likely to stay positive: the Two Sessions have set an optimistic tone; policies emphasizing technological innovation and expanding domestic demand are expected to be further implemented. Second, external risks appear to be easing: tensions between the U.S. and Iran have somewhat subsided, especially with alternative oil shipping routes emerging; Trump may visit China at the end of the month, potentially improving Sino-U.S. relations. (2) Liquidity may remain loose: the Fed may cut rates again this year, keeping the dollar index low in the short term; central banks may also lower reserve requirements or cut rates. (3) Earnings expectations could continue to improve, supporting the spring rally beyond the Two Sessions: economic recovery may persist, earnings may improve, and as this year marks the start of a five-year plan, historical experience suggests profits and policy support could sustain the rally. (4) Market sentiment indicators and sector rotation show the spring rally is not over: market gains, turnover, and trading volume are not at extremes; sector rotation is ongoing, with consumer and financial sectors still lagging and potential for catch-up.

Dongwu Strategy: Similar Transmission Path of Current Conflict to Russia-Ukraine

Based on historical review since 2015, geopolitical events typically cause short-term disturbances, quickly absorbed within a week, not dominating major asset trends. However, the 2022 Russia-Ukraine conflict broke this pattern, with an unexpected prolonged war leading to higher oil prices and new transmission paths: rising oil prices → imported inflation expectations → tightening of Fed policies → deteriorating dollar liquidity → pressure on A-shares. The current conflict’s transmission path shares similarities with Russia-Ukraine. Strategies should focus on oil price trends with three approaches: 1) Neutral hedging with tech + energy if conflict remains contained and oil prices stabilize, favoring AI tech and resource sectors; 2) Reduce tech exposure if conflict prolongs, Strait of Hormuz remains blocked, oil prices stay high, and a strong dollar pattern re-emerges, possibly causing tech adjustments; 3) Aggressive stance maintaining tech positions if oil prices spike sharply and expectations of U.S. suppression increase, betting on oil price correction and rate cut expectations.

Zhejiang Merchants Strategy: Market Volatility and Growth Divergence, Focus on Sector Rotation

As geopolitical tensions persist and inflation expectations rise with oil prices, global financial markets face significant pressure. Given the complex evolution of Middle East conflicts and asset volatility, we expect A- and H-shares to undergo some correction. The A-share weighted indices (e.g., Shanghai Composite, CSI 300) have been consolidating since mid-January, with structural adjustments likely stabilizing after mid-March. Growth indices (e.g., CSI 500, CSI 1000, Guozhen 2000) have shown MACD divergence and large gains since last year, facing earnings pressure in earnings season, likely stabilizing after April. Among H-shares, Hang Seng Tech Index rebounded near the 500-day moving average but with rapid prior declines, needing consolidation and re-confirmation. Despite recent volatility, on a quarterly basis, we remain optimistic about a “systematic slow bull” opportunity.

Zhongtai Strategy: Post-Geopolitical Conflict Asset Performance

The rapid deterioration of Middle East geopolitics has become a key driver of global markets. Since last weekend’s joint U.S.-Israel strikes on Iran, tensions have escalated sharply, causing significant disruptions. Oil prices surged, and major economies like Japan, Europe, and affected markets suffered heavy impacts. A-shares, affected by global geopolitical shocks, have gradually recovered, with main indices bottoming out and rebounding this week. Overall, value sectors performed relatively well, especially oil and shipping. TMT sectors declined due to risk aversion, but long-term, global instability will likely deepen investments in high-end manufacturing and technology, with short-term declines offset by long-term growth. The government work report released this week aligns with market expectations. As annual and quarterly reports are disclosed and economic data released, markets may shift focus back to fundamentals. Sectors like AI computing power and robotics, previously hot, will face earnings tests, with ongoing market attention.

Cinda Strategy: Rising Prices as a Positive Signal in Bull Markets

Statistically, it is rare for commodities to rise while stocks fall. Since 1968, there have been 10 instances of commodity price increases, but only 3 involved U.S. stock market corrections. Generally, both U.S. and Chinese ROE benefit from commodity price rises unless inflation accelerates sharply, causing liquidity tightening. Currently, geopolitical conflicts are uncertain; if they do not cause systemic shocks to global energy supply, temporary oil price premiums are likely to fall, reducing the chance of a rate hike cycle reversal. Meanwhile, domestic deflationary pressures are stronger, so inflation concerns are limited. Without further positive signals, the probability of sharp rate increases remains low. The combination of rising ROE and falling rates is favorable for stocks. Short-term market fluctuations may test geopolitical risks, pre- and post-Two Sessions capital flows, economic data, and earnings reports, but the overall trend remains optimistic. After sufficient defensive positioning and energy price increases, the market may return to more sustained themes like new productive forces or PPI trading.

Hua An Strategy: Is the Spring Market Over?

Currently, the spring rally in A-shares may still continue in the short term. (1) Policies remain supportive, and external risks may ease marginally: domestic policies are optimistic, with the Two Sessions emphasizing innovation and demand expansion; externally, tensions between the U.S. and Iran have eased somewhat, and Trump’s potential visit to China could improve relations. (2) Liquidity may stay loose: the Fed may cut rates again this year, keeping the dollar low; central banks may also lower reserve requirements or rates. (3) Earnings expectations could continue to improve, supporting the rally beyond the Two Sessions: economic recovery may persist, profits may rise, and the start of a five-year plan could sustain the rally. (4) Market sentiment indicators and sector rotation suggest the rally is not over: gains, turnover, and trading volume are not at extremes; consumer and financial sectors still have room for catch-up.

Dongwu Strategy: Similar Transmission Path of Current Conflict to Russia-Ukraine

Historical review since 2015 shows geopolitical events usually cause short-term shocks quickly absorbed within a week, not dominating major asset trends. However, the 2022 Russia-Ukraine conflict defied this pattern, with an extended war leading to higher oil prices and new transmission paths: rising oil prices → imported inflation expectations → Fed policy tightening → dollar liquidity deterioration → pressure on A-shares. The current conflict’s transmission path resembles that of Russia-Ukraine. Strategies should focus on oil price trends with three approaches: 1) Neutral hedging with tech + energy if conflict remains contained and oil stabilizes, favoring AI tech and resource sectors; 2) Reduce tech exposure if conflict prolongs, Strait of Hormuz remains blocked, and oil stays high, possibly reversing dollar strength and causing tech adjustments; 3) Maintain tech positions if oil spikes sharply and expectations of U.S. suppression increase, betting on oil price correction and rate cut expectations.

Zhejiang Merchants Strategy: Market Volatility and Growth Divergence, Focus on Sector Rotation

As geopolitical tensions persist and inflation expectations rise with oil prices, global markets face significant pressure. Given the complex evolution of Middle East conflicts and asset volatility, we expect A- and H-shares to undergo some correction. The A-share weighted indices (e.g., Shanghai Composite, CSI 300) have been consolidating since mid-January, with structural adjustments likely stabilizing after mid-March. Growth indices (e.g., CSI 500, CSI 1000, Guozhen 2000) have shown MACD divergence and large gains since last year, facing earnings pressure in earnings season, likely stabilizing after April. Among H-shares, Hang Seng Tech Index rebounded near the 500-day moving average but with rapid prior declines, needing consolidation and re-confirmation. Despite recent volatility, on a quarterly basis, we remain optimistic about a “systematic slow bull” opportunity.

Zhongtai Strategy: How Will Major Assets Evolve After Geopolitical Conflicts

The rapid deterioration of Middle East geopolitics has become a key driver of global markets. Since last weekend’s joint U.S.-Israel strikes on Iran, tensions have escalated sharply, causing significant disruptions. Oil prices surged, and major economies like Japan, Europe, and affected markets suffered heavy impacts. A-shares, affected by global geopolitical shocks, have gradually recovered, with main indices bottoming out and rebounding this week. Overall, value sectors performed relatively well, especially oil and shipping. TMT sectors declined due to risk aversion, but long-term, global instability will likely deepen investments in high-end manufacturing and technology, with short-term declines offset by long-term growth. The government work report released this week aligns with market expectations. As annual and quarterly reports are disclosed and economic data released, markets may shift focus back to fundamentals. Sectors like AI computing power and robotics, previously hot, will face earnings tests, with ongoing market attention.

Cinda Strategy: Rising Prices as a Positive Signal in Bull Markets

Statistically, it is rare for commodities to rise while stocks fall. Since 1968, there have been 10 instances of commodity price increases, but only 3 involved U.S. stock market corrections. Generally, both U.S. and Chinese ROE benefit from commodity price rises unless inflation accelerates sharply, causing liquidity tightening. Currently, geopolitical conflicts are uncertain; if they do not cause systemic shocks to global energy supply, temporary oil price premiums are likely to fall, reducing the chance of a rate hike cycle reversal. Meanwhile, domestic deflationary pressures are stronger, so inflation concerns are limited. Without further positive signals, the probability of sharp rate increases remains low. The combination of rising ROE and falling rates is favorable for stocks. Short-term market fluctuations may test geopolitical risks, pre- and post-Two Sessions capital flows, economic data, and earnings reports, but the overall trend remains optimistic. After sufficient defensive positioning and energy price increases, the market may return to more sustained themes like new productive forces or PPI trading.

Hua An Strategy: Is the Spring Market Over?

Currently, the spring rally in A-shares may still continue in the short term. (1) Policies remain supportive, and external risks may ease marginally: domestic policies are optimistic, with the Two Sessions emphasizing innovation and demand expansion; externally, tensions between the U.S. and Iran have eased somewhat, and Trump’s potential visit to China could improve relations. (2) Liquidity may stay loose: the Fed may cut rates again this year, keeping the dollar low; central banks may also lower reserve requirements or rates. (3) Earnings expectations could continue to improve, supporting the rally beyond the Two Sessions: economic recovery may persist, profits may rise, and the start of a five-year plan could sustain the rally. (4) Market sentiment indicators and sector rotation suggest the rally is not over: gains, turnover, and trading volume are not at extremes; consumer and financial sectors still have room for catch-up.