Shanghai Composite Index turns positive

In this morning session, the index initially dipped to a low and then rebounded. The Shanghai Composite Index led the way to turn positive first; earlier it had fallen by more than 1%. During the session, the commercial aerospace, Chinese baijiu, and precious metals sectors saw notable intraday moves and helped the Shanghai Composite Index regain the 3,900-point level. The declines in the Shenzhen Component Index, the ChiNext Index, and the STAR Market Composite Index narrowed.

As of the close at midday, the Shanghai Composite Index rose 0.23%, to 3,922.72 points. Across the three exchanges in Shanghai and Shenzhen and the Beijing market, more than 2,500 stocks advanced. The total trading value for the first half of the day exceeded 1.32 trillion yuan, increasing by 182.1 billion yuan versus the previous trading day.

China Galaxy Securities believes that under external uncertainty, domestic manufacturing’s advantage in certainty has become more prominent, providing strong support for the resilience of the A-share market. The main themes of energy security, independent and controllable capabilities, and industrial upgrading are clear, with stronger defensive attributes and better cost-performance for allocation. In April, as annual reports and first-quarter reports are released in a concentrated manner, sectors with high earnings certainty and continuously improving sentiment will become the core direction that funds focus on.

Industrial Bank Securities stated that after this round of conflict, changes in global liquidity expectations triggered by an elevated oil-price midline will further accelerate the market’s main contradictions in pricing—shifting from the prior focus on valuation expansion toward earnings-driven and certainty-driven dynamics. April’s allocation can be summarized as “three certainties”: (1) directions with strong earnings certainty and solid growth logic, represented by the North America computing power chain; (2) the energy substitution and price-transmission directions that benefit from the oil-price midline moving higher, such as the new energy industry chain, coal, utilities, agricultural products, and others; and (3) the final is a certainty-based risk-hedging direction led by domestic demand and defense, such as banks, food and beverage staples/consumption, and infrastructure construction.

Japan and South Korea’s stock markets opened today with sharp declines. The Nikkei 225 index and the Korea Composite Index both once fell by more than 5% (see the earlier report in this newspaper on the Japan and South Korea stock markets that opened with a sharp selloff). As of the time of writing, the decline has narrowed somewhat. The Nikkei 225 index is down 3.62% at 52,438.96 points, and the Korea Composite Index is down 2.9% at 5,281.32 points.

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