【Daily Review】Shanghai Index Falls Over 1%, Barely Holds Above 4000 Points, Nearly 5000 Stocks Decline Across Market, Oil and Gas Stocks Gain Against the Trend

Caixin March 19 News: The market experienced a day of oscillation and adjustment, with the three major indices all falling more than 1%. The Shanghai Composite Index briefly fell below the 4,000-point mark during the session. The combined trading volume of the Shanghai and Shenzhen markets reached 2.11 trillion yuan, an increase of 64.9 billion yuan compared to the previous trading day.

In terms of sectors, market hotspots and themes showed weak rotation, sentiment dropped to freezing point, and nearly 5,000 stocks declined across the market. From the sector perspective, green energy and computing power synergy concepts defied the trend and strengthened. Oriental New Energy (rights protection), Guangdong Electric Power A, Shao Neng Shares, Guang’an Aizhong, and Huadian Liaoning hit the daily limit, while Jiwei New Energy touched a 20% limit-up. Computing power leasing concepts were active again, with Meili Cloud hitting two consecutive limit-ups, GuiGuang Network (rights protection), Tongniu Information, and Litong Electronics reaching the daily limit. Oil and gas concepts performed actively, with China New Energy, Lanyan Holdings, Tianhao Energy, and Hongtong Gas hitting the daily limit.

On the downside, non-ferrous metals led declines, with Weiling Shares, Zhongjin Gold, and Industrial Bank Silver and Tin falling sharply. The steel sector weakened, with Anyang Steel hitting the daily limit-down. By the close, the Shanghai Composite Index fell 1.39%, the Shenzhen Component Index dropped 2.02%, and the ChiNext Index declined 1.11%.

Sector Highlights

Oil and gas stocks led gains, with Tianhao Energy, Lanyan Holdings, Hongtong Gas, and China New Energy hitting the daily limit. Stocks like Keli Co., Tongyuan Petroleum, and Intercontinental Oil & Gas also saw significant increases.

In the news, WTI crude oil rose to $98 per barrel, Brent crude oil increased to $105 per barrel. Additionally, U.S. natural gas futures surged over 6% at one point. As the ongoing conflict between the U.S., Israel, and Iran continues, analysts and traders worldwide are increasingly considering the possibility of long-term disruptions in the Strait of Hormuz, gradually adjusting risk pricing. Moreover, the market believes that current global responses to long-term supply disruptions are limited, and speculative trading features are becoming more apparent, further increasing energy market volatility. However, it is important to note that related oil and gas stocks quickly retreated at times, leaving many trapped positions to be resolved. It is expected that market speculation in this sector will focus more on core leading stocks.

Green energy and computing power synergy concepts defied the trend and strengthened. Oriental New Energy, Guangdong Electric Power A, Shao Neng Shares, Guang’an Aizhong, and Huadian Liaoning hit the daily limit. On the news front, the government explicitly requires that the green electricity share in newly built data centers at national computing hubs not be less than 80%. This rigid indicator not only creates significant new consumption scenarios for green electricity but also accelerates the implementation of new business models such as “green power direct connection” and “source-grid-load-storage integration.”

Open Source Securities stated that by 2026, the supply shock of green certificates will end, and combined with the formal assessment of green power consumption ratios for major energy-consuming units like steel, cement, polysilicon, and newly built data centers at hubs, the vitality of the green certificate market is expected to be further stimulated. New energy consumption models such as green power direct connection and computing power synergy are expected to create a second growth curve for operators. Additionally, under rising energy costs, power generation companies with cost penetration ability and stable cash flows are gaining market recognition.

Individual Stocks

On the individual stock front, the market’s loss-making effect intensified again today, with nearly 5,000 stocks declining. Non-ferrous metals led the declines, with Hongqiao Holdings and Weiling Shares hitting the daily limit-down. Zijin Mining, Luoyang Molybdenum, Aluminum Corporation of China, and Huayou Cobalt also saw significant declines. Chemical stocks continued their weakness, with Liming Shares, Zhenhua Shares, and Xinjing Road hitting the daily limit, while popular stocks like Sanfangxiang, Chitianhua, and Baichuan Shares also suffered heavy losses.

Meanwhile, green energy and computing power synergy concepts remain the best-performing sectors for continuity. Huadian Liaoning successfully extended to four consecutive limit-ups, Huadian Energy hit five limit-ups in eight days, and Shao Neng Shares and Guangdong Electric Power A both achieved consecutive limit-ups, reaching new highs. Jinkai New Energy maintained an upward trend.

The leasing of computing power continued yesterday’s gains, with Meili Cloud hitting two consecutive limit-ups, GuiGuang Network, Tongniu Information, and Litong Electronics reaching the daily limit, and Hongjing Technology rising over 13% to new highs.

However, given the currently weak short-term risk appetite, hot sectors are still mainly characterized by rapid rotation. After waiting for sentiment to hit a second freezing point, attention can be focused on sectors that resonate with the index for a rebound.

Market Outlook

Today’s market experienced oscillation and decline, with all three major indices falling over 1%, and the Shanghai Index briefly losing the 4,000-point level. From a technical perspective, as the Shanghai Index continued to fall, the original box-shaped consolidation lower boundary was effectively broken, and the short- and medium-term moving averages showed divergence downward. If a strong recovery does not occur in the short term, the mid-term trend may turn bearish, with the correction period and space further extended.

In terms of market sectors, due to ongoing Middle East conflicts, funds are shifting to oil and gas, electricity, and banking sectors for risk aversion. The tech and computing power chain also experienced divergence adjustments under external liquidity pressure, but funds outflows from segments like CPO and computing power leasing are relatively controlled, and core related stocks still show strong absorption momentum.

However, the main tech line represented by AI chains has accumulated significant profit-taking, and whether it can maintain a trend remains a key focus. If short-term risk sentiment causes concentrated profit-taking, further downside risks should be watched.

Market Highlights

1. The People’s Bank of China: Firmly maintain the stable operation of stock, bond, and foreign exchange markets

On March 18, the Party Committee of the People’s Bank of China held an expanded meeting, emphasizing actively and prudently resolving financial risks in key areas. It called for balancing economic growth, structural adjustment, and financial risk prevention. The bank will continue to promote the resolution of debt risks in financing platforms, adhere to market-oriented and rule-of-law principles, and prudently handle risks in small and medium-sized financial institutions. It will leverage the macro-prudential management and financial stability functions of the central bank, and firmly maintain the stable operation of stock, bond, and foreign exchange markets. The establishment of liquidity support mechanisms for non-bank financial institutions under specific scenarios will be studied. The bank will continue to work with relevant departments to crack down on illegal financial activities.

2. The People’s Bank of China: Continue to implement a moderately relaxed monetary policy

The Party Committee of the People’s Bank of China also held an expanded meeting on March 18, stating that a moderately relaxed monetary policy will be continued. The focus is on promoting stable economic growth and reasonable price increases, leveraging both incremental and stock policies, as well as the integration of monetary and fiscal policies. The bank will use tools such as reserve requirement ratios, government bond purchases, Medium-term Lending Facility (MLF), and reverse repos to maintain ample liquidity, aligning social financing scale and money supply growth with economic growth and inflation expectations. It will guide and regulate interest rates based on economic and financial conditions, strengthen the implementation and supervision of interest rate policies, standardize financing intermediary costs, and promote low overall financing costs in society. The bank will improve communication with the market to enhance policy transparency and keep the RMB exchange rate basically stable at a reasonable and balanced level.