China Everbright Securities: Overseas "Stagflation" Concerns Heating Up - Which Sectors Stand to Benefit?

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Source: Everbright Securities

This Week’s A-Share Market Divergence

This week, A-shares experienced volatility and adjustments. Among major broad-based indices, most A-share broad indices closed lower, with the SSE 50, Small and Medium 100, and SSE Composite Index showing smaller declines, while the STAR Market 50, ChiNext Index, and CSI 500 declined more significantly.

Key Events This Week

On the policy front, the Ministry of Industry and Information Technology issued the “Six Do’s and Six Don’ts” recommendations to prevent security risks from OpenClaw open-source intelligent agents; the Fourth Session of the 14th National People’s Congress concluded, passing multiple resolutions and laws; the Governor of the People’s Bank of China stated at an economic and financial experts’ forum that the central bank will continue to implement a moderately easing monetary policy in the next phase.

Regarding economic data, February CPI rose 1.3% year-on-year, the highest in nearly three years; in the first two months, China’s total import and export value reached 7.73 trillion yuan, up 18.3% YoY, with exports at 4.62 trillion yuan, up 19.2%. Overseas, G7 finance ministers issued a statement on March 9, saying they are ready to take necessary measures, including releasing reserves, to support global energy supply; U.S. President Trump on March 11 stated that there are “almost no targets left to strike” inside Iran, and U.S. military actions against Iran will end soon.

Warming Concerns of “Stagflation” Overseas—Which Sectors May Benefit?

Amid rising concerns of overseas stagflation, market investment logic may shift from “pro-cyclical growth” to “inflation resistance, stable growth, high certainty.” For allocation, prioritize upstream resource commodities (oil, coal, non-ferrous metals, agricultural products) and essential consumer staples (food and beverages, pharmaceuticals, daily necessities) as core holdings, while also allocating to “independent growth + policy-supported” hard technology sectors (semiconductors, aerospace, high-end equipment manufacturing, AI computing power) and government consumption-related sectors (traditional infrastructure, emerging infrastructure) as flexible options. This approach helps avoid midstream manufacturing and discretionary consumption sectors facing cost and demand pressures, better coping with market volatility under stagflation.

Looking ahead, we believe external shocks may gradually weaken, and market performance is worth期待. Although conflicts in the Middle East remain highly uncertain, the sentiment impact on the domestic market may have peaked, and attention to Middle East developments could decrease, allowing the market to return to its own rhythm. Currently, the overall tone of the “Two Sessions” is stable, laying a solid policy foundation for stock market growth. Additionally, the market will enter a period of intensive data and policy verification over the next month. Based on previous earnings forecast trends, economic and corporate profit data are expected to support the capital market.

Overall, opportunities in the equity market are still greater than risks, and performance is worth期待.

Structurally, focus on热点 (hot topics), short-term watch on Middle East situation, and long-term focus on growth and pro-cyclical themes. If overseas economies enter stagflation, pay attention to related benefiting sectors. Due to Middle East conflicts, short-term safe-haven assets and resource commodities may perform. Long-term, focus on growth and pro-cyclicality. Growth sectors will benefit from sustained industry enthusiasm and increased risk appetite during spring rallies, such as humanoid robots and AI. Pro-cyclical sectors mainly benefit from strong commodity prices and policy support, including resource commodities with potential for continued price increases and offline service-related fields. Additionally, if overseas economies face stagflation, relevant benefiting sectors should be monitored.

Risk Analysis: 1. Policy implementation delays; 2. Significant market sentiment decline; 3. Economic growth falls far below expectations; 4. Major deterioration in China-U.S. relations; 5. Ongoing escalation of Middle East tensions.