Daily Market Review: Shanghai Composite Index dips then rebounds, up 1.78%. Over 5,100 stocks in the entire market closed in the green, with the power sector continuing its surge.

From: Financial Association

On March 24, Financial Association reports that the market rebounded after a day of bottom-fishing, with both the Shanghai Composite Index and the Shenzhen Component Index rising over 1%. The ChiNext Index turned positive in the last trading minutes, having previously dropped nearly 2.5%. There was a clear divergence between the yellow and white lines, with the micro-cap stock index soaring over 5%. The trading volume in the Shanghai and Shenzhen markets was 2.08 trillion yuan, down 348.7 billion from the previous trading day. In terms of market segments, hotspots rotated quickly, with over 5,100 stocks rising, including 100 stocks hitting the daily limit. In terms of sectors, the power sector surged, with over a dozen constituent stocks hitting the daily limit. Huadian Liaoning Energy had seven consecutive limits, Shaoneng Co. had four limits in five days, Liaoning Energy had two consecutive limits, and Huayin Electric Power, Jinkaixin Energy, and Disen Co. hit the limit. The military industry sector strengthened, with Changcheng Military Industry, Hunan Tianyan, and Construction Industry hitting the daily limit. The fiber-optic concept continued to rise in the afternoon, with Yangtze Optical Fiber and Tongding Interconnection hitting the limit. The shipping sector fluctuated and rose, with China Merchants Nanyou hitting the limit. On the downside, oil and gas stocks performed weakly, with Keli Co., Tongyuan Petroleum, and Intercontinental Oil and Gas all down over 5%. By the market close, the Shanghai Composite Index rose 1.78%, the Shenzhen Component Index rose 1.43%, and the ChiNext Index rose 0.5%.

Sector Analysis

The green power sector strengthened again, with Disen Co., Energy Saving Wind Power, Huayin Electric Power, Huadian Liaoning Energy, and Ningbo Energy all hitting the daily limit. On the news front, on March 23, the National Bureau of Statistics stated that it will work with relevant departments to vigorously promote the collaboration project of computing and electricity, ensuring that the proportion of green electricity applications in newly built computing facilities at hub nodes reaches over 80%, maximizing the supportive role of green electricity.

Analysts pointed out that the consensus has been reached that “the end of AI is electricity,” which aptly reveals the symbiotic relationship between computing power and electricity. The essence of computing and electricity collaboration is to organically integrate computing infrastructure with the electricity system (generation, transmission, distribution, and consumption) through intelligent scheduling. However, it should be noted that some high-priced stocks have accumulated significant gains, and after today’s collective acceleration in price, short-term sentiment may reach a peak, requiring attention to signs of major fund offloading.

The military industry sector strengthened, with Changcheng Military Industry, Hunan Tianyan, Construction Industry, and Galaxy Electronics hitting the daily limit, while Northern Long Dragon, Fujirey, Inner Mongolia One Machine, and Jieqiang Equipment were among the top gainers.

The 14th Five-Year Plan has made headway in the high-quality advancement of national defense and military modernization. The construction of new domain and quality combat forces will accelerate the upgrading of advanced weaponry, ushering in a new development period for military equipment. From a market perspective, the military industry sector has previously undergone relatively thorough consolidation, holding certain positional advantages, and can be seen as an important rotation line in the process of overcoming excessive declines.

The fiber-optic concept continued to rise in the afternoon, with Yangtze Optical Fiber and Tongding Interconnection hitting the limit, and Hengtong Optic-Electric, Huamai Technology, and Teifa Information among the top gainers. On the news front, Heilongjiang Telecom recently released an emergency procurement tender for outdoor optical cables, with prices for 652D fiber exceeding 105 yuan per single-core kilometer, once again breaking historical highs. The acceptance of high prices for optical cables by operators continues to rise; meanwhile, upstream germanium tetrachloride (the core raw material for optical rod production) saw a daily price increase of 33%, signaling tightening supply and demand being transmitted to the raw materials market, further confirming the upward logic of the optical fiber and cable boom cycle.

From a market perspective, the computing hardware direction remains relatively resilient following previous adjustments, and the mid-term trend of relevant core targets has not yet been completely damaged. At this juncture of improving market sentiment, it may be easier to gain a return of funds.

Individual Stocks

Today, short-term sentiment significantly improved, with only around 300 stocks closing down across the market, and over a hundred stocks hitting the daily limit. Among them, high-priced consecutive limit stocks are still concentrated in power stocks, with Huadian Liaoning Energy successfully expanding the market limit height to seven limits. Zhongnan Culture had seven limits in twelve days, Shaoneng Co. had four limits in five days, and Guangdong Electric Power A had three limits in five days, while Tuori New Energy and Zhejiang New Energy had two consecutive limits. However, it should be noted that the power sector has recently risen against the trend, benefiting from a crowded strategy due to the overall market risk appetite decreasing, with some funds choosing to huddle for safety. If sentiment continues to recover in the future, it is possible that some high-priced stocks may face a risk of correction due to the loosening of the huddle.

The technology stock direction also rebounded, with subsectors like computing hardware, PCB, and fiber optics leading the rise, while Yangtze Optical Fiber and Jin’an Guoji hit the daily limit, with Nanya New Materials hitting new highs. Additionally, computing chips also performed brightly, with Muxi Co. rising over 13%, Moore Threads and Chipone Co. rising over 8%, and Cambricon rising nearly 6%. As a high-interest direction in the market, the sustainability of the technology growth style rebound may serve as a barometer for short-term sentiment.

Market Outlook

Today, the market rebounded after a decline of over 3% yesterday, ultimately closing above 3,880 points, partially repairing yesterday’s losses, with over 5,100 stocks closing in the green and a hundred stocks hitting the daily limit, validating the logic of short-term repair and rebound. From the index perspective, whether the Shanghai Composite Index can regain the 5-day moving average and fill the gap left by yesterday’s drop can be regarded as an important reference for the strength of this round of rebound. In terms of trading volume, although individual stocks rose broadly today, the trading volume in the two markets shrank by nearly 350 billion compared to yesterday, indicating that the buying power is still insufficient for sustained rebounds, and future rebounds will still need to be supported by increased volume. On the other hand, the ChiNext Index experienced significant fluctuations throughout the day, dropping nearly 2.5% in the morning before ending slightly in the green. The weight of sectors like photovoltaics and energy storage faced a correction, but in the afternoon, the strengthening of computing hardware successfully drove the ChiNext Index to stop the decline and rebound. It is expected that the capital battle between these two core hot sectors will continue in the future. Overall, the market has shown signs of phase repair after geopolitical disturbances weakened, but insufficient volume restricts the upward space. In terms of operations, it is advisable to focus more on individual stocks rather than the index, and grasping the rapid rotation rhythm of hot spots may be key.

Market News Focus

1. Due to the high price correction of international gold, Chow Tai Fook has postponed the price adjustment of its “one-price” products.

Due to the high price correction of international gold, the prices of brand gold jewelry continue to decline. On that day, Chow Tai Fook reported 1,346 yuan per gram, down 29 yuan per gram from yesterday; Chow Sang Sang reported 1,350 yuan per gram; and Lao Feng Xiang reported 1,345 yuan per gram. Market news indicates that the fluctuating and declining gold prices have disrupted some brands’ price increase plans, and the price adjustment plan for Chow Tai Fook’s “one-price” products has been postponed multiple times. In this regard, several Chow Tai Fook stores in Beijing confirmed that the price adjustment plan has indeed been postponed. However, the stores stated that they have received new price tags from headquarters but have not yet changed them. “We are just waiting for notification from headquarters; if there is a price adjustment, we will change the labels immediately. Currently, the prices of ‘one-price’ products are generally higher than the current gold prices, and the processing fees are also higher than those calculated by weight. The recent large correction in gold prices has temporarily delayed the price adjustment plan. The subsequent adjustments will be based on headquarters’ notifications.”

2. Zimbabwe’s expectation of lifting the lithium export ban falls short; relevant Chinese enterprises respond.

The main contract for lithium carbonate rose 7.10% during the day on March 24, reaching 154,400 yuan per ton. On the news front, Zimbabwe’s lithium export ban has lasted nearly a month, with no news of lifting it, and its duration may exceed previous market expectations. Market participants had previously estimated that the impact of Zimbabwe’s export policy adjustment on the market would last about a month. On March 24, reporters learned from Chinese enterprises engaged in lithium resources in Zimbabwe that their local mines and lithium salt enterprises are still operating normally, but the export of lithium concentrates remains suspended, and the local export ban has not been accompanied by further details. As for when exports can resume, all parties are still in active communication. The company still maintains inventory. It is worth noting that even if Zimbabwe’s lithium exports are lifted later, transporting lithium concentrates back to the country takes about two months.

(Financial Association, Fenglin)