Stocks are stunned! Over 5,100 stocks have fallen, but 4 signals tell you: there's no need to be pessimistic

AI Market Signals Indicating a Rebound Amidst Major Sell-Off

Produced by | Company Research Department

Written by | Zhan Bo

Today, the A-shares market experienced a “Black Monday.” All three major indices plummeted, with the market showing a broad decline. The Shanghai Composite Index opened below the 3,900-point mark and closed near 3,800, hitting a recent low during the correction.

Market Overview: Panic spread, with over 5,100 stocks declining across both markets, including more than 100 limit-down stocks. Only about 300 stocks rose, accounting for less than 6%. In terms of trading volume, the combined turnover of the Shanghai and Shenzhen markets reached approximately 2.45 trillion yuan today, an increase of over 140 billion yuan from the previous trading day, indicating panic selling during the decline.

Amid the chaos, coal and oil & petrochemical sectors stood out as the only two sectors rising among the first-tier industries in Shenwan. This was mainly due to high international oil prices and strong gains in coke futures contracts, with funds flowing into traditional energy sectors with stable cash flows, seeking refuge amid high oil prices.

By the close, the Shanghai Composite Index was at 3,813.28 points, down 3.63%; the Shenzhen Component Index closed at 13,345.51 points, down 3.76%; and the ChiNext Index at 3,235.22 points, down 3.49%.

Source: Wind

Multiple Factors Resonating, Market Under Significant Pressure

Today’s deep correction results from a confluence of multiple internal and external negative factors.

First, geopolitical risks have intensified, sharply increasing global risk aversion. Recent conflicts in the Middle East have escalated, with tensions in the Strait of Hormuz heightening concerns over energy supply and global inflation. As a result, international crude oil prices fluctuated significantly, with Brent crude briefly surpassing $107 per barrel, fueling inflation expectations worldwide. The risk pricing of prolonged conflict directly impacted global risk assets’ preferences.

Second, expectations of tightening external liquidity suppressed valuations. The Fed’s hawkish stance strengthened, and market expectations of a shift in monetary policy this year fell short, causing U.S. Treasury yields to rise rapidly. The 10-year U.S. Treasury yield soared to 4.39%, the highest since August last year, exerting significant downward pressure on valuations of growth stocks globally. Last Friday, the Nasdaq plunged 2.01%, directly affecting the opening sentiment of China’s tech sector today.

Third, internal liquidity faced short-term pressure. Although the central bank maintained a moderately easing monetary stance, it net withdrew 129.3 billion yuan from the open market today, intensifying short-term liquidity tensions and market volatility.

No Need for Excessive Pessimism

Faced with today’s large red candle, investors may feel fearful. But rational analysis of the current environment gives us reason to stay calm.

1. Fundamentals remain intact, with profit recovery as the core support. The recent decline is mainly driven by sentiment and liquidity disturbances, not a collapse of fundamentals. As 2026 marks the start of the 14th Five-Year Plan, macroeconomic policies remain stable. The central bank has explicitly committed to maintaining financial market stability and implementing moderately loose monetary policies. More importantly, with upcoming annual and first-quarter reports, the logic of profit recovery is gradually being validated, providing a solid bottom support for the market.

2. “Golden dips” are often created by declines. Historical experience shows that sharp drops are among the best entry points in bull or volatile markets. Today’s irrational sell-off has wrongfully punished many high-quality stocks with long-term competitiveness. When panic dominates, it is an ideal window for long-term funds to deploy. The so-called “bottom” is never formed amid euphoria but is born from despair and fear.

3. Technical indicators show strong recovery potential. After short-term dips to the 3,800–3,900 point range, the Shanghai Index has touched an important support level at 3,819 points, with a small lower shadow on today’s close, indicating some funds are already buying on dips. Additionally, the index is approaching the key annual moving average support at 3,720 points. Once major stocks stabilize or positive news catalyzes, the index could quickly rebound with a technical rally.

4. Volume precedes price. Despite the large decline, trading volume remains high at 2.45 trillion yuan, indicating that panic selling has not led to liquidity drying up or a wave of limit-downs with no volume. Large funds are still actively trading, leaving room for future recovery. Especially in valuations of new energy and AI-related stocks, such as Zhongji Xuchuang, which are reasonably valued with high earnings visibility, some stocks even turned positive during the session.

Many brokerages have issued research reports, generally expecting the market to remain volatile in the short term but not pessimistic about the medium-term trend.

CMB International Securities believes that, based on technical patterns and sentiment indicators, the current decline is in its late stage, with limited further downside. External shocks may still cause short-term fluctuations, but confirming the bottom will require time and patience.

Everbright Securities is relatively optimistic, noting that despite external pressures, domestic economic data showing a “good start” and active central bank policies serve as “ballast” for the market. They expect the market to mainly fluctuate sideways, and investors need not be overly pessimistic.

Recommended Strategies for the Current Market

• Avoid reckless selling: Selling at emotional lows is a major mistake. If you hold high-quality, reasonably valued core assets, ignore short-term noise and hold your positions.

• Focus on structural opportunities: After broad declines, market differentiation is inevitable. Pay attention to two categories: first, defensive sectors with high dividends and low valuations (e.g., coal, utilities); second, long-term winners in tech that have been unfairly punished, especially those with global competitiveness and benefiting from domestic substitution and new productivity trends, waiting for sentiment to recover and valuation to rebound.

• Manage positions flexibly: Until market trends clarify, maintain moderate and flexible positions. Avoid full positions or complete cash, and use volatility for tactical trades to lower costs.

Investing is a journey of self-discipline. The market on March 23 was cold, but it revealed who the true “hard bones” are. Remember, there is no market that only rises or only falls. Today’s correction is for a better tomorrow. In a period of geopolitical conflicts and macroeconomic transitions, volatility is normal, and confidence is more valuable than gold.

Let us clear the fog of emotion, believe in national strength, cycles, and the power of value. In this challenging moment, stay calm, stay true to your original intentions, and wait patiently for the bloom.