Shanghai Index narrowly maintains the 4000-point level as the energy and computing sectors defy the trend and strengthen.

The ongoing Middle East situation continues to impact global capital markets. On March 19, the A-share market experienced a volatile correction, with all four major indices closing lower and individual stocks showing widespread declines. Market risk aversion remained high. The Shanghai Composite Index briefly fell below the 4,000-point psychological threshold during the session but recovered slightly by the close. The Shenzhen Component Index, ChiNext Index, and STAR Market Index all declined simultaneously. Overall market profitability has significantly cooled, with investors adopting a wait-and-see attitude. Only a few sectors such as oil and gas, coal, and computing power defied the trend and held up.

At the close, the four major indices showed mixed performance but remained generally weak: the Shanghai Composite closed at 4,006.55 points, down 1.39%, with a intraday low of 3,994.17 points; the Shenzhen Component closed at 13,901.57 points, down 2.02%; the ChiNext Index closed at 3,309.10 points, down 1.11%; and the STAR Market Index closed at 1,689.34 points, down 2.30%. The combined trading volume of Shanghai and Shenzhen markets was 2.13 trillion yuan, slightly up by 66.2 billion yuan from the previous trading day.

In terms of sectors, energy stocks such as oil, natural gas, and coal became safe havens, supported by the ongoing escalation of geopolitical conflicts in the Middle East. Notably, China National Offshore Oil Corporation (CNOOC) and China National Petroleum Corporation (CNPC) rose over 5%, with Shaanxi Black Cat and Blue Flame Holdings hitting daily limit-ups.

According to CCTV News, early on March 19, Qatar’s Ras Laffan natural gas facility was hit again by missiles. Earlier that day, Iran claimed to have attacked oil facilities in Gulf countries hosting Iranian enemies. The Middle East tensions continued to push international crude oil futures prices higher yesterday. As of 17:30 Beijing time on March 19, NYMEX WTI crude futures rose 0.97% to $96.39 per barrel; ICE Brent crude futures increased 6.13% to $109 per barrel.

In contrast, precious metals and non-ferrous metals led yesterday’s declines, with stocks like China Gold, Industrial Securities Silver & Tin, and Luoyang Molybdenum falling sharply. As of 17:30 Beijing time on March 19, spot gold prices in London dropped over 2%, COMEX gold futures fell more than 3%, London silver spot prices declined over 5%, and COMEX silver futures dropped over 7%.

On the news front, the Federal Reserve’s interest rate decision overnight was perceived as hawkish by the market. On March 18, U.S. Federal Reserve announced that the federal funds rate target range would remain at 3.5% to 3.75%.

In active themes, the computing power concept in the A-share market was particularly strong yesterday. Copper Mountain Information hit the daily limit with a 20% increase, Hongjing Technology rose over 13% to a new high, and Lotus Holdings, Jinkai New Energy, and Litong Electronics also hit the daily limit.

On March 18, Alibaba Cloud and Baidu Smart Cloud announced price adjustments for core products such as AI computing power and storage. Alibaba Cloud’s announcement stated that due to global AI demand surge and supply chain price increases, products like the Pingtouge Zhenwu 810E computing card saw prices rise by 5%–34%, and the CPFS (Intelligent Computing Edition) storage product increased by 30%. Baidu Smart Cloud also raised prices for AI computing-related services by approximately 5%–30%, with parallel file storage and other services increasing by about 30%.

Regarding the market outlook amid geopolitical conflicts, Chief Strategy Analyst Zhang Qiyao of Industrial Securities stated in a research report that last week’s market shifted from “panic trading” during the early conflict stage to a “reversal trading” as conflict severity eased. However, as Iran maintained a firm stance against confrontation and continued to blockade the strait, the market realized the conflict might persist longer. Oil prices rose again, and stagflation expectations began to dominate. Currently, as the situation appears to be stalemated, the ongoing high oil prices could impact the economy and inflation, influencing policy directions and asset prices. This dynamic warrants continued monitoring.

Zhang Qiyao also noted that as some signals indicate the conflict’s intensity has peaked, the market’s focus is shifting from “rising intensity” to “negotiation and bargaining,” suggesting that future A-share performance may become more “dominated by ourselves.” As the market begins to price in the effects of high oil prices on the economy and policy, domestic policy certainty will become a key support for the A-shares’ “self-reliance.” China’s current prices remain low, and policy interest rates are at historically low levels, allowing higher tolerance for imported inflation caused by rising oil prices. Policy space remains ample, with a likely focus on “stabilizing growth” and maintaining ample liquidity. The certainty of policies and abundant liquidity will be crucial in helping A-shares withstand external shocks in the near future.