Over 4,800 stocks are rising, and the Shanghai Composite Index has returned to 3,900 points! Today's A-shares are showing strength.

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Reporter | Xiao Ruidong (每经记者|肖芮冬) Editor | Zhao Yun (每经编辑|赵云)

On March 25, the market saw volatile rebound; the Shanghai Composite Index rose by more than 1% and reclaimed 3,900 points. The ChiNext board index rose by more than 2%. As of the close, the Shanghai Composite Index was up 1.3%, the Shenzhen Component Index was up 1.95%, and the ChiNext board index was up 2.01%.

Looking at sectors, the power sector surged, the concept of power-computing leasing strengthened, the CPO concept was active, and the fiber-optic concept rebounded higher after a period of fluctuation. On the downside, oil and gas stocks performed relatively weakly.

More than 4,800 stocks across the entire market rose, with limit-up rallies for more than 100 stocks for two consecutive trading days. The total trading value of the Shanghai and Shenzhen markets was 2.18 trillion yuan, up 97 billion yuan versus the previous trading day.

Since March 13, and continuing up to yesterday (March 24), the A-share market could be said to have remained in a “short-term downward trend.”

Take the most commonly used moving averages as an example. According to Wind data, during this period, although two indicators—namely, the Wind All A and the All A average stock price—have seen multiple intraday “bottoming and rebound,” the daily K-line has continued to be suppressed by the 5-day moving average.

Even though yesterday’s market—long overdue—welcomed a broad-based rebound, in the view of more cautious retail investors, it still isn’t enough to prove that the short-term trend has begun to reverse.

Unless the market shows a more proactive, stronger performance—for example, “actively moving upward to fill the gap,” such as “crossing above the moving averages.”

And that is exactly what happened on today’s trading screen.

As of the close, including the two aforementioned key indicators, major stock indexes all showed the pattern of “a bullish candle breaking through the N line.”

The small-cap micro-cap index, which led gains, after standing above the 120-day line yesterday, opened today and immediately moved above the 5-day line, only to pull back as it continued to approach the 60-day line.

Indexes with slightly lower gains—such as the Shanghai Composite Index and the CSI 300—gapped higher at the open and, after multiple trading days, for the first time returned above the 5-day line.

The ChiNext board index, whose trend is currently the healthiest, today managed more easily to reclaim all moving averages.

The market is able to keep rebounding so smoothly for no other reason than that both internal and external factors are improving.

Internally, today the market released volume at the right time and did not “waste” the hard-won repair inflection point—giving the broader market a momentum to break above pressure levels right at the open.

据报道，为保持银行体系流动性充裕，3月25日，中国人民银行以固定数量、利率招标、多重价位中标方式开展500B元MLF操作，期限为1年期。由于3月有450BMLF到期。这意味着3月MLF续作加量50B，为连续第13个月加量。

Externally, international oil prices are still weakening—although the decline is not large, they have remained below the 5-day and 10-day moving average prices for three consecutive days, which in fact matches the “negative correlation” linkage between oil prices and stock prices in recent times.

Some believe that the morning’s decline in international oil prices and the high open of Asia-Pacific stock markets are still related to U.S. President Donald Trump’s remarks implying that “the U.S. may hold talks with Iran.”

This is true, but what should be paid more attention to is that the two sides’ statements have been “clashing” from time to time—whether the U.S.-Iran dialogue produces substantive progress, and the relationship with the path of oil prices, is gradually fading—i.e., the “de-sensitization” phenomenon that appeared earlier.

Under a broad-based rally, it seems that strength across different sectors each has its own rationale, so for today we will temporarily skip analysis along these lines.

What’s more worth关注 is that, in recent days, “smart money” has already been entering the market, and for now it appears they are buying at the bottom.

Wind data shows that on Monday (March 23), during the big drop, the entire market’s ETFs received a net inflow of 21.8k yuan. Further breakdown shows that among broad-based ETFs with the top 10 by size across the entire market, the combined net inflow on that day was 10.8 billion yuan—more than half of the “precision value-buying” funds.

Actually, before that day, these 10 broad-based ETFs had been receiving capital quietly accumulating for multiple consecutive days.

For example, the largest by size, the Huatai-PineBridge CSI 300 ETF, recorded net inflows for six consecutive trading days—from last Monday (March 16) through this Monday—accumulating 8.04 billion yuan.

Over the same period, the 10 broad-based ETFs collectively “absorbed” about 500B yuan.

To be fair, this may not necessarily be the work of the “big funds” we’re familiar with. After all, Central Huijin—the entity that functions like a “stabilization fund”—has not issued any announcement to “verify its identity.”

But as long as there is capital in the market willing to take a detour through these ETFs to accumulate at low levels, objectively it can also play a certain role in cushioning the market.

According to a report from Guotai Junan Securities: from the short-term perspective, the evolution direction of the U.S.-Iran conflict still has significant uncertainty; before the situation becomes clear, volatility in the equity market may continue. But it needs to be made clear that this adjustment in A-shares stems from a typical liquidity negative feedback loop—“a sudden war pushes up oil prices → revives inflation expectations → repricing of the global interest-rate path → pressure from the denominator side feeding back to equity-market valuations, weighing on equity valuations.” It is more an adjustment driven by sentiment and expectations rather than a fundamental, macro-level change. Therefore, equating this round of short-term rapid selloff with the end of the bull market can easily seem blindly pessimistic.

What determines the long-term direction of A-shares is always the internal, core logic of itself. The logic of China’s market/assets has advantages and distinctiveness. This round, which began with the bull-market sentiment on September 24, 2024, has not changed. From a medium-term perspective, China’s new economic development remains generally on a steady and improving track; the clearing out of the old economy continues to advance toward a sunlit development path. Domestic policy continues with a positive orientation: the two sessions clearly proposed that fiscal policy should be more proactive and monetary policy moderately accommodative. Since the start of the year, there are already signs of improvement in production, consumption, investment, and other data. For A-shares, shocks from external geopolitical events may instead contribute relatively better allocation opportunities.

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