What Happened? A-Share Market Declined Unilaterally in Afternoon, Shanghai Composite Index Shows "Four Consecutive Red Days" for First Time in Over a Year

On March 17, the market experienced a day of oscillation and adjustment, with the Shenzhen Component Index falling over 1% and the ChiNext Index dropping more than 2%. By the close, the Shanghai Composite Index declined 0.85%, the Shenzhen Composite fell 1.87%, and the ChiNext Index dropped 2.29%.

In terms of sectors, major financial stocks performed countertrend, the chemical sector was repeatedly active, and the real estate sector oscillated higher. On the downside, sectors such as computing hardware and semiconductors led declines, with the CPO concept experiencing a collective correction.

Over 4,500 stocks in the market declined. The combined trading volume of the Shanghai and Shenzhen markets was only 2.21 trillion yuan, shrinking by 117.5 billion yuan compared to the previous trading day.

Perhaps due to the market’s lower volume or the dominance of quantitative funds, the entire A-share market showed a general “rise and fall” pattern this morning. The turning points of the three major indices downward generally occurred around 10:06 AM.

In the afternoon, as international oil prices rebounded sharply, market risk aversion intensified again. The market continued to decline along with external markets, giving back all the gains made yesterday.

Notably, the Shanghai Index recorded four consecutive declines today, the first time since early last year (December 31, 2024, to January 6, 2025). Over the past year, the Shanghai Index often stabilized and rebounded after three consecutive declines.

At the same time, the A-share market will face its fourth “bottom support” test this month.

An optimistic view is that although the afternoon market seemed to resist resistance, this pattern is more conducive to releasing panic emotions compared to a “late surge,” making the technical rebound in the next trading day potentially more decisive.

Conversely, if this time the 60-day moving average support is “effectively broken,” many technical investors may choose to cut losses and exit.

Regarding individual stocks, over 4,500 stocks declined today, making it the second-highest number of declining stocks this month.

By screening, there are 8 stocks that “gained ≥10% yesterday and fell >5% today.” Among them, Kechuang Technology hit the daily limit yesterday but hit the limit down today.

If the criteria are slightly relaxed to “gained >5% yesterday and fell >5% today,” the number of stocks reaches 45.

Many of these stocks are from the same sector or are part of the tech sector that saw “front-running” funds yesterday.

Concentrated Realization of Computing Hardware

Following the opening of Nvidia’s GTC 2026 conference and Jensen Huang’s speech, the CPO concept quickly opened lower and continued to decline, laying the groundwork for a “realization” atmosphere in the computing hardware sector. (You can review the detailed speech here)

For example, the “high-speed copper cable connection” concept, even though Huang mentioned “copper remains important” and “optical and copper coexist,” was somewhat positive, but the sector still opened high and then declined.

By the close, concepts such as CPO, fiber optics, communication equipment, and lithography machines ranked among the biggest decliners.

Correspondingly, some active funds shifted into low-priced sectors like steel and real estate.

On the news front, recent policies from three departments have deployed hydrogen energy pilot projects, emphasizing the transition of the steel industry from high-carbon to low-carbon processes, utilizing industrial by-product hydrogen and renewable energy for hydrogen production, and building low-carbon metallurgical facilities using hydrogen and pure hydrogen as reducing agents. Establishing stable downstream consumption channels for low-carbon steel and related products.

According to the People’s Bank of China website, the Shanghai branch of the People’s Bank of China and the Shanghai Regulatory Bureau of the National Financial Regulatory Administration issued a notice adjusting the minimum down payment ratio for commercial housing loans in Shanghai. Starting March 16, 2026, the minimum down payment ratio for commercial housing loans in Shanghai will be no less than 30%.

Shenwan Hongyuan believes that after the adjustment in China’s real estate sector, the industry’s fundamentals are gradually approaching a bottom. The profitability recovery of quality real estate companies is expected to occur earlier and be more resilient. Currently, the sector’s valuation is at a historic low, with some top companies’ PB ratios or market values at record lows, making the sector attractive.

Why Are Major Financials Like Banks and Securities Firms Moving Differently?

Another notable point today is the collective movement of insurance, banking, and securities sectors, which objectively played a “stabilizing” role.

Some analysts believe that recent favorable catalysts have driven these sectors.

For securities firms, the approval of Ant Group’s tender offer for YaoCai Securities Financial is a key event. On the evening of March 16, YaoCai Securities Financial announced that the tender offer initiated by Ant Group had been approved by relevant authorities, with completion expected by March 30. After the transaction, Ant Group will hold a controlling stake.

Regarding banks, the government work report this year emphasized regulating competition among financial institutions, deepening the reduction and quality improvement of local small and medium-sized financial institutions, further reforming the capital market’s investment and financing system, improving long-term capital entry mechanisms, protecting investors, expanding private equity and venture capital exit channels, and increasing the proportion of direct and equity financing.

On the insurance front, Guotai Haitong expects that, on the liability side, strong savings demand will drive continued growth in NBV of listed insurers in 2026, with sustained improvement in property insurance underwriting profits; on the investment side, insurers are expected to steadily increase equity asset allocation, improve asset-liability duration gaps, and promote stable profitability, maintaining an “overweight” industry rating.

Looking ahead, Debon Securities believes that the A-share market may continue to show a structural pattern, with rotations between technological growth and traditional cycles likely to be the main theme.

They note that from a macroeconomic perspective, China is in a critical period of transformation and upgrading, with technological innovation and industrial upgrading as key development directions.

In terms of timing, the intensive disclosure of annual reports by listed companies in late March will be a key factor influencing individual stock performance. Companies with better-than-expected results and confirmed growth prospects are likely to be favored, while those underperforming or with deteriorating fundamentals may face adjustments.

Additionally, policy changes, fiscal and monetary policy trends, and other macroeconomic factors should also be closely monitored.

(Article source: Daily Economic News)