Galaxy Securities: Performance Will Become the Core Anchor Point for the Next Stage of Market Trends

China Galaxy Securities points out that since the end of February, the escalation and repeated disturbances in US-Iran conflicts have unsettled market sentiment. Sharp fluctuations in oil prices have driven inflation expectations higher. The Federal Reserve’s rate cut expectations have been dashed, and the performance of risk assets has been suppressed. Compared to this, in the context of a general adjustment in global equity markets, the A-share market has shown strong resilience. The 2026 government work report focuses on domestic demand-led growth, cultivating and expanding new drivers of growth, and achieving high-level technological independence and self-reliance. The “14th Five-Year Plan” outline is based on a position that builds on the past and looks to the future, with high-quality development as the primary goal, emphasizing the construction of a modern industrial system and strategic importance of high-level technological independence. It insists on expanding domestic demand as a strategic foundation and, from a long-term perspective, clarifies the investment logic of seeking “quality” in the “new.” Supported by the resilience and self-reliance of the A-share market, the market will gradually shift from “emotion-driven” to “fundamentals-driven” in the next phase, with performance becoming the core anchor for future trends.

Full Text

【China Galaxy Strategy】“14th Five-Year Plan” Setting the Tone, Which Sectors Demonstrate A-Share Resilience?

Key Points

This Week’s A-Share Market: (1) From March 9 to March 13, 2026, the A-share market experienced volatility and adjustments, with major broad-based indices showing divergence. The All A Index fell 0.48%. The Sci-Tech Innovation 50 and Beijing Stock Exchange 50 declined over 2%. Meanwhile, the ChiNext Index, Shenzhen Component, and CSI 300 rose, with the ChiNext Index up 2.51%. (2) In terms of style, the large-cap style outperformed this week, with the CSI 300 (0.19%) outperforming the CSI 1000 (-0.42%). The five major style indices showed mixed performance: cyclicals fell sharply by 1.72%, while stability styles rose by 3.16%. (3) Sector-wise, most primary industries declined this week. Coal, electrical equipment, and construction decoration led gains, while defense military, petroleum and petrochemicals, and comprehensive sectors declined.

Fund Flows This Week: (1) Trading activity in the A-share market slightly cooled. The average daily turnover was 24,987 billion yuan, down 1,459.12 billion yuan from last week; the daily turnover rate was 2.1332%, down 0.11 percentage points. (2) As of Thursday, the margin financing and securities lending balance was 2,664.647 billion yuan, up 19.1 billion yuan from last week. (3) Among newly established funds this week, 21 equity funds were issued, totaling 19.824 billion units, up 14.59 billion units from last week; these accounted for 54.93% of the total units issued this week. (4) From March 5 to March 11, global funds net withdrew 3.615 billion USD from A-shares (previous net inflow was 1.471 billion USD). Among them, overseas funds net withdrew 1.035 billion USD from A-shares (previous net inflow was 1.144 billion USD).

Valuation Changes This Week: The PE (TTM) of the All A Index decreased by 0.44% to 23.33 times, at the 94.22% percentile since 2010; PB (LF) fell 0.27% to 1.93 times, at the 56.66% percentile since 2010. The bond yield spread of the All A shares is 2.4717%, near the 3-year rolling average (3.3177%) minus 1.63 standard deviations, at the 42.78% percentile since 2010.

A-Share Market Investment Outlook: Since the end of February, the escalation and repeated disturbances in US-Iran conflicts have unsettled market sentiment. Sharp fluctuations in oil prices have driven inflation expectations higher. The Federal Reserve’s rate cut expectations have been dashed, and risk assets have been under pressure. Compared to this, the A-share market has demonstrated strong resilience amid a general adjustment in global equities. The 2026 government work report emphasizes domestic demand-led growth, nurturing and expanding new growth drivers, and achieving high-level technological independence and self-reliance. The “14th Five-Year Plan” is positioned to build on the past and look to the future, prioritizing high-quality development, modern industrial system construction, and strategic importance of technological independence. It maintains the strategy of expanding domestic demand and clarifies the long-term investment logic of seeking “quality” in the “new.” Supported by the resilience and “self-reliance” of the A-share market, the market will gradually shift from “emotion-driven” to “fundamentals-driven,” with performance becoming the core anchor for the next phase.

Allocation Opportunities: First, sectors related to price increases and risk aversion. The ongoing US-Iran tensions and Strait of Hormuz tensions directly boost energy and alternative demand, leading to repeated activity in related sectors, though with increased volatility. Focus on chemicals, non-ferrous metals, coal, shipping ports, and oil and gas sectors. Second, sectors benefiting from improved supply-demand dynamics and industry profit recovery, as well as dividend assets with valuation safety margins, such as basic chemicals, non-ferrous metals, steel, building materials, and financials. Third, technological innovation remains a long-term certainty, with key areas including power equipment, new energy, storage, computing power, consumer electronics, communication equipment, communication services, semiconductors, and military industries. For consumer sectors, focus on light industry, textiles and apparel, home appliances, and agriculture.

Risk Tips

External uncertainties; policy risks below expectations; market sentiment instability and ongoing liquidity adjustments.

(Source: Cailian Press)