Midday Review: Shanghai Index Down 0.71%, Steel and Non-Ferrous Sectors Decline, Ocean Economy Concept Remains Active

On the morning of the 16th, the Shanghai Composite Index weakly declined during trading, while the ChiNext Index rose against the trend. About 3,400 A-shares were in the red.

By midday, the Shanghai Composite fell 0.71% to 4,066.4 points, the Shenzhen Component Index dropped 0.7%, and the ChiNext Index increased 0.18%. The combined turnover of the Shanghai, Shenzhen, and Beijing markets was approximately 1.52 trillion yuan.

In terms of sectors, steel, non-ferrous metals, coal, power, and chemicals declined, while alcohol, agriculture, banking, and real estate rose. The seed industry, marine economy, and storage chip concepts were active.

CMB Securities stated that geopolitical conflicts have shifted the market’s core contradictions toward supply security and strategic resources, changing the driving logic from risk aversion to concerns about re-inflation. Rising oil prices reinforce inflation expectations, suppress the outlook for rate cuts, and impact most assets. The influence of oil prices on inflation is likely to be pulse-like, with a very low probability of severe inflation similar to the 1970s-80s. Regarding monetary policy, short-term inflation concerns will pose greater obstacles to the U.S. rate cut policy, possibly delaying rate cuts to the second half of the year. However, this does not prevent a quick market risk appetite recovery if conflicts ease, with the A-shares remaining mainly volatile. Looking ahead, short-term geopolitical disturbances and rising nationalism support the strategic value of resource commodities. In the medium to long term, policies against internal competition (“anti-involution”), potential resonance of U.S.-China demand, and the return of the gold shadow anchor could accelerate PPI turning positive.