A-shares surged again, with the Shanghai Composite Index returning to 3900 points, and over 4900 stocks rising! Power stocks led another wave of limit-up gains, China Power LiaoNeng hit 8 consecutive limit-ups, and the "Three Oil" companies all declined together | A-shares closing

Reporter | Du Bo

Editor | Duan Lian, Du Hengfeng Proofread by | He Xiaotao

On March 25, the market saw choppy rebound action, with the Shanghai Composite Index rising more than 1% and returning above 3,900 points. By the close, the Shanghai Composite Index was up 1.3%, the Shenzhen Component Index rose 1.95%, and the ChiNext Index gained 2.01%. The STAR Market Composite Index rose 1.77%, to 1,668.08 points. The combined trading value of the Shanghai and Shenzhen markets was 2.18 trillion yuan, up by 97 billion yuan versus the prior trading day. Across the city, more than 4,900 stocks rose, and more than 100 stocks hit their daily limit.

From the sector perspective, the power sector continued to surge. The green power concept led the gains, with more than a dozen constituent stocks hitting the daily trading limit. Huadian Liaoning notched an eight-day streak of limit-ups. Shaoneng shares notched five limit-ups in six days. Guangdong Power A delivered four limit-ups in six days. The computing power leasing concept strengthened, with ErliuSan, Oruide, Litong Electronics, and Dawei Technology all hitting the daily limit. The CPO concept showed active performance, with Mingpu Optics, Alaid, and Kechuan Technology all hitting the daily limit. The fiber optics concept saw a pull-up after choppy trading; Tongding Interconnection notched a two-day streak of limit-ups, and TeFa Information sealed the daily trading limit.

On the downside, China National Petroleum, Sinopec, and CNOOC all fell collectively for the second consecutive day.

A research report from Guotai Haitong Research said that, from a short-term perspective, the evolution direction of the U.S.-Iran conflict still has considerable uncertainty. Before the situation becomes clear, volatility in the equity market may still persist. However, it should be made clear that this adjustment in A-shares is driven by the typical liquidity negative feedback loop of “a sudden war pushing up oil prices → triggering a resurgence of inflation expectations → global interest-rate path repricing → pressure from the denominator side feeding back, weighing on equity market valuations.” More than that, this adjustment is largely driven by sentiment and expectations, rather than a substantive change in macro fundamentals. Therefore, equating this round of sharp short-term sell-off with the end of the bull market may seem unnecessarily pessimistic.

What ultimately determines the long-term direction of A-shares is always its own internal core logic. The China market/asset logic has advantages and is differentiated. The bull-market tone that began on September 24, 2024 has not changed. From a medium-term perspective, China’s new economy development remains generally stable and continues to improve; the ongoing clearance of the old economy and its shift toward a brighter development path continues. Domestic policies continue with a positive orientation: the two sessions clearly proposed that fiscal policy should be more proactive and monetary policy moderately loose, and since the start of the year, there are already signs of improvement in data such as production, consumption, and investment. For A-shares, the impact of external geopolitical events may even translate into better allocation opportunities.

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