Investment Insights | Under External Shocks: What Signals Does A-Share Market Need to Stabilize?

(Source: Guojin Securities, Hour 5)

Dear Investors:

Yesterday (March 23), the Shanghai Composite Index dropped 3.63%, closing at 3,813.28 points, with a low of 3,794.68 points during the day. Nearly 5,000 stocks declined, and many investors experienced noticeable withdrawals from their accounts. I truly understand the feeling of being suddenly hit by external risks.

In the face of this pain, anxiety and even the desire to completely sell off are natural reactions. I don’t want to say “don’t panic” or “golden buying opportunity.” We focus on one thing: helping everyone clarify what to watch and do next. Turning uncertainty into observable and manageable events.

PART 01

Why did it fall yesterday? — Emotional release from internal and external resonance

Main causes:

1. External risks “double kill”: The Federal Reserve’s unexpectedly hawkish stance (interest rate cut expectations in 2026 compressed from 2 cuts to ≤1) + escalation of Middle East geopolitical conflicts, oil prices surpassing $110, triggering global stagflation concerns, and the 10-year U.S. Treasury yield soaring to 4.39%.

2. Technical breakdown: Falling below the key support of 3,900 points triggered quantile stop-losses and panic selling, creating a negative cycle of “decline—worsening sentiment—further decline.”

PART 02

What to watch next: two dimensions, four indicators

Geopolitical risks are indeed unpredictable, but whether the impact persists and whether the market stabilizes can be observed.

【Dimension 1: External risk indicators — judging if the impact will continue】

Key observation: Over the next three days, focus on official updates on Middle East developments and speeches by Federal Reserve officials. These two factors are the “switch” for this adjustment. If there are signs of easing, market sentiment may recover quickly.

【Dimension 2: Internal market signals — judging if A-shares are stabilizing】

Operational reference: Among these signals, if one appears, consider small positions to test; if two appear, gradually increase positions; if three or more, the probability of stabilization is higher.

PART 03

What to do now: three bottom lines, two actions

Before clear signals emerge, we recommend you do three things:

First, confirm your bottom line. Check two questions: ① Are you using leverage? ② Does this money affect your life in the next three years? If both answers are “no,” then the current volatility is just numbers, not the end. You have the “patience” and control to wait.

Second, stop watching the market obsessively. After yesterday, it’s advisable to turn off market apps. The market won’t reverse just because you watch it more, but your emotions will become more anxious from overattention.

Third, focus on only one point tomorrow. If you must watch, on March 24, only pay attention to: whether the Shanghai Index can hold above 3,780 points and whether trading volume shrinks. Holding steady with reduced volume indicates weakening selling pressure; if it can’t hold, continue observing without rushing to act.

Finally, a few words from the heart

The hardest moments in investing are often not long-term declines but moments of “unexpected heavy blows.” Geopolitical factors are uncontrollable external variables, but asset allocation’s purpose is to give us a “tolerable” bottom line in an unpredictable world.

Many institutions believe that A-shares are in the latter half of the correction, with limited room for further sharp declines. We cannot predict where the next missile will land, but we can confirm: as long as the bottom line is maintained, the initiative remains in our hands.

(Written by: Guojin Securities Wealth Product Center)

Disclaimer: The information published in this column is for investor education purposes only and does not constitute any investment advice. Investors should not replace their independent judgment or make decisions solely based on this information. While we strive for accuracy and reliability, we do not guarantee the correctness or completeness of the information and are not responsible for any losses resulting from the use of this information. Investing involves risks; please proceed with caution.