When Will the Current Healthy Correction in the A-Share Market End? Top 10 Brokers' Strategies Here

Cailian Press, March 22 (Editor: Lachen) The top ten brokerage firms’ latest strategic views are now available, detailed as follows:

CITIC Securities: Key Controversies Regarding the Impact of Middle East Conflict — Answers Will Emerge Gradually After April

Regarding the core controversies about the impact of the Middle East conflict, answers will gradually become clear after April. The solutions to the previously mentioned key market issues will be implemented step by step in April. Until then, the market will remain in a narrative-driven phase, reflecting liquidity withdrawal characteristics. U.S. Treasury yields are still rising rapidly, with the 10-year yield soaring from 3.97% at the end of February to the current 4.39%, the highest since August last year. From the current global market landscape, as risk aversion diminishes, countries are strengthening energy resource security and accelerating electrification, which has become a new trend. China’s competitive manufacturing advantage is just beginning to shift from pricing power to profit margins. From a trading logic perspective, rising prices and PPI rebound are ongoing signals. The only current concern is that upstream prices are difficult to pass downstream. At present, upstream and midstream sectors have started raising prices, but downstream remains cautious and is digesting inventories. Only over time, as commodity volatility subsides, downstream procurement will normalize. Whether prices can be maintained, profit margins expanded, and market share advantages translate into pricing power remains to be seen. Investors should remain patient and calmly handle stock fluctuations. The decisive period is expected in April and May. In the first three months of this year, sector rotations and gains/losses driven mainly by narratives occurred. Even if trading did not lock in profits, it’s not a big issue. In fact, the median return of active equity funds has already returned to 0.7% this year.

Firmly focus on re-evaluating the allocation based on China’s manufacturing pricing power. The current core holdings are industries with a share advantage in China, high costs for overseas capacity reconfiguration, and supply flexibility easily influenced by policies—namely new energy, chemicals, electrical equipment, and non-ferrous metals. Recent liquidity shocks have pushed valuations of many stocks into cheaper zones, similar to the export stocks after April 7 last year, bringing significant expectations and undervaluation. Based on these core holdings, it is recommended to increase exposure to undervalued factors, especially in insurance, brokerage, and power sectors. Considering short-term signals, price increases remain the sharpest tool, and PPI trading is increasingly likely to be the main theme for the year, with April and May as the decision period. Several clues and structural opportunities to prioritize include: 1) Chemical products with alternative raw materials/process routes under oil shocks (Chinese varieties often have higher coal content than overseas competitors), where rising crude oil prices will create high spreads; 2) Varieties with significant Middle East/Western European capacity, where supply disruptions may lead to additional supply-demand gaps and price hikes; 3) Substitutes affected by costs that lead to price increases, driven by demand growth; 4) Stocks already in an upward price channel, where rising costs provide opportunities for pass-through amid tight supply and demand.

Huaxi Securities: Allocate to Banks and Wait for More “Market Stabilization” Policies

Huaxi Securities believes that most global stock markets declined this week, with A-shares and European markets leading the fall. On one hand, the geopolitical situation between the US and Iran remains uncertain, with significant unpredictability in oil prices and inflation trends, increasing the risk of stagflation. On the other hand, the Fed’s March rate decision kept rates unchanged but adopted a hawkish tone, with the possibility of future rate hikes, raising concerns about dollar tightening. Under risk aversion, the A-share market retreated overall, with trading volume shrinking, reflecting cooling investor sentiment amid rapid sector rotations. Structurally, defensive sectors like food and beverages, banks, and high-growth directions such as storage and AI computing remain relatively resilient.

Market outlook: Focus on allocating to banks and wait for more “market stabilization” policies. The ongoing US-Iran conflict and expectations of overseas rate cuts are intertwined, keeping global markets under risk aversion in the short term. Compared to this, domestic policy environment is more certain. Regulators have explicitly signaled “stabilizing the capital market,” and subsequent policies such as “stabilization funds,” support for structural tools, long-term funds entering the market, and counter-cyclical regulatory policies are worth期待. Meanwhile, imported inflation has limited impact on domestic monetary policy, and a loose liquidity environment will continue. Fiscal efforts will also help restore investor expectations.

Hua An Securities: When Will the Current Healthy Adjustment End?

Ongoing risks from overseas tariffs, Iran-US tensions, and inflation fears have led to a cautious outlook. The US-Iran conflict remains unresolved, and Trump’s postponement of his China visit indicates continued external disturbances in the short term. Inflation concerns driven by rising oil prices led the March FOMC to adopt a hawkish stance, with increased chances of future rate hikes. Therefore, external shocks persist. During the first healthy correction in the growth cycle, although the duration is short, leading sectors and representative stocks typically experience a “decline → rebound → decline” pattern with wide fluctuations. We believe the recent market decline and the strong rebound of growth stocks and the telecom sector are part of this three-phase cycle. There may still be a “final dip” before a new upward trend, which will lay the foundation for the next rally.

The US-Iran tensions remain high, and Trump’s delay in visiting China suggests ongoing external volatility. The inflation worries from rising oil prices, combined with the March FOMC’s hawkish tone and increased likelihood of rate hikes, mean external disturbances will continue. During this first healthy correction in the growth cycle, although short, the main sectors and key stocks tend to follow a “drop → rebound → drop” rhythm with wide swings. The current environment shows growth stocks and telecoms leading the rally, but a “last dip” may still occur, solidifying the basis for a new upward phase.

Orient Securities: Domestic Risk Assessment Continues to Decline, Risk Appetite Shifts Toward the Middle

In the short term, global risk assessments are rising, risk-free rates are increasing, risk appetite is declining, and earnings expectations are being revised downward, posing significant challenges to global capital markets. However, domestically, there is little need for excessive concern. Recent years have seen diminishing negative impacts from geopolitical risks on China’s equity markets. The process of risk assessment declining and risk appetite shifting from both ends toward the middle continues.

Energy security and technological manufacturing are converging, with a focus on photovoltaic equipment. The main theme remains global energy security; from a style perspective, sectors like power equipment and machinery are favored. Further, examining the intersection and evaluating profitability and valuation, photovoltaic equipment is relatively undervalued.

China Galaxy Securities: The Duration and Evolution of Geopolitical Conflicts Remain Highly Uncertain

“Two changes” and “two constants”: The first change is the geopolitical shift under Strait tensions. The US-Iran conflict continues to escalate, with no signs of de-escalation. As tensions rise, military strikes are expanding to regional energy infrastructure, with spillover risks persisting. The second change is the phase of global liquidity tightening. With rising oil prices and inflation expectations, easing expectations diminish, and global liquidity environment tightens marginally, pressuring risk assets. The constants are: 1) Policy expectations remain unchanged. When implementing the decisions from the National Two Sessions, authorities emphasize maintaining stability in stock, bond, and forex markets, with the overall direction of policy support unchanged. 2) The medium- to long-term liquidity outlook remains stable and improving. The combination of household wealth migration and long-term funds entering the market ensures a steady supply of long-term capital to A-shares.

A-share market outlook: The duration and evolution of geopolitical conflicts remain highly uncertain, and short-term disruptions to global risk assets are unlikely to subside quickly. Expect continued high volatility, with the market likely to digest external pressures through oscillations and sector rotations. Structurally, market focus will be on inflation dynamics, with oil price movements under geopolitical tensions being a key variable. Allocation suggestions include: 1) As US-Iran tensions escalate, energy and alternative demand sectors such as coal chemicals, coal, shipping ports, and oil & gas should be prioritized. 2) Defensive sectors like finance, utilities, and transportation are also recommended. 3) Technology innovation sectors, including power equipment, new energy, energy storage, semiconductors, computing power, and communication equipment. Additionally, consumer sectors are undervalued historically, with some segments showing potential for valuation recovery, such as agriculture, food & beverages, and household appliances.

Industrial Securities: When Will the Counterattack Signal Sound?

In summary, recent market adjustments mainly stem from two concerns: 1) the risk of “stagflation,” and 2) the risk of “out-of-control escalation of conflicts.” Neither may be the final outcome of this conflict cycle. In the short term, escalation of conflicts might create opportunities for de-escalation, meaning the market’s rally often begins quietly when sentiment is most pessimistic. In the medium to long term, “stagflation” could be the most pessimistic scenario for the economy, but it’s not necessarily the baseline. The current market’s pessimistic expectations for this are already priced in, providing a foundation for medium- and long-term recovery.

In terms of allocation, based on the upward revisions of 2026 earnings forecasts since the start of the year, focus on sectors expected to perform well in the first quarter: AI hardware (consumer electronics, components, computing and communication equipment, electronic chemicals), software (gaming, digital media, IT services); advanced manufacturing and export chains: new energy (batteries, photovoltaics, wind power), military industry (marine equipment), machinery (rail transit equipment, specialized machinery, construction machinery), commercial vehicles, home appliance parts, medical services; cyclical price-increasing chains: non-ferrous metals, coal, steel, chemicals (rubber), building materials (glass fiber), shipping ports, gas; consumer & finance: agriculture, retail, jewelry, brokerage, etc.

Zhongtai Securities: How to Understand the Recent Sharp Drop in Precious Metals?

Recently, the inverse correlation between gold and oil prices has increased significantly. Oil prices rose sharply this week, while precious metals declined notably. Generally, rising oil prices tend to be bullish for gold via two channels: 1) increased safe-haven demand due to geopolitical tensions; 2) rising energy prices boosting inflation expectations, which enhances gold’s role as an inflation hedge. Thus, oil and gold often show some positive correlation, especially when inflation expectations rise, increasing demand for gold.

However, this cycle shows that gold’s pricing logic is undergoing a phase shift. After a year of rising prices, gold’s asset attribute is gradually shifting from “safe-haven asset” to “traded risk asset.” On one hand, expectations of global liquidity easing, central bank gold purchases, and geopolitical risks have driven large gains. On the other hand, persistent capital inflows have made trading structures crowded, increasing gold’s sensitivity to marginal liquidity. In this context, gold is no longer driven solely by fundamentals but also by liquidity and trading structures.

In the short term, it is advisable to reduce exposure to conflict-related sectors like shipping, ports, and coal chemicals. In the medium to long term, focus on two main themes: 1) New energy and global manufacturing restructuring—under energy security and expanding power demand (AI computing power), demand for PV, energy storage, and power equipment is expected to grow; 2) Geopolitical turbulence driving a “security-first” restructuring of global manufacturing, with demand for non-ferrous metals, engineering machinery, and high-end equipment likely to shift upward, offering medium- to long-term allocation value.

GF Securities: Which Industries Can Maintain Independent High Prosperity Beyond US-Iran Tensions and High Oil Prices?

Looking ahead: aside from conflicts and high oil prices, which industries might sustain high prosperity independently? Currently, the overseas AI supply chain in optical communications has deepened its visibility into 2027, remaining a clear growth direction and the main position for institutions. However, its relation to Middle East conflicts (oil prices → US interest rate environment → US AI → domestic supply chain) involves short-term volatility. Based on past experience with tech stocks, industries that can maintain independent high prosperity and are less sensitive to geopolitical and oil price fluctuations are preferable. To control portfolio volatility and hedge risks, we suggest continuing to allocate two beta sectors with upward trends and less oil sensitivity: energy storage chain (inverters/lithium batteries) and domestic AIDC chain (especially ByteDance-related).

Jia Securities: How Does High Oil Price Affect the Stock Market?

Currently, the resilience of A-shares supported by policies, fundamentals, and liquidity remains relatively strong, with a short-term oscillation trend. (1) The impact of rising oil prices on inflation may be weaker than in 2007 and 2022: a) the weight of energy in US CPI has decreased significantly; b) US economy and employment are slowing; c) short-term imported inflation in China is limited. (2) The effect on US stocks may be negative but weaker than in 2008 and 2022: a) US inflation may rise due to oil prices but less so than in 2007 and 2022, reducing the likelihood of rate hikes; b) the negative impact on US fundamentals is limited. (3) A-shares may remain resilient in the short term supported by policies, fundamentals, and liquidity: a) policies remain proactive; b) economic and profit recovery continues: with peak season and cost advantages, investment, consumption, and exports may rebound; c) rising PPI could further boost corporate profits. Additionally, domestic liquidity may stay relatively loose: a) overseas liquidity easing expectations have declined; b) inflation pressure is small, and the central bank may increase liquidity injection; c) foreign capital inflows may slow short-term, but long-term institutional funds could continue entering.

Industry allocation: balanced in high-quality tech, some cyclical, and undervalued dividend sectors. (1) Short-term outperformance expected in petrochemicals and high-quality tech: a) historical review shows energy-related sectors outperform during rapid oil price increases; b) tech growth sectors are suppressed during oil rallies but with good performance in some segments; c) sectors like petrochemicals, power, new energy, and tech hardware may benefit from rising oil prices and AI demand. (2) Balanced allocation: focus on sectors with upward policy and industry trends, such as new energy (AI power, energy storage), communications (AI hardware), semiconductors, non-ferrous metals, chemicals, military (aerospace), and healthcare; also include undervalued sectors like coal, power, and banking.

Guojin Securities: The Narrative of Global Physical Asset Rise Has Not Ended

This week, major global assets declined broadly, seemingly due to demand slowdown fears, but the core issue is the escalation of US-Iran conflict reversing the previous “weak dollar” narrative. Before the conflict: the dollar was weakening, capital flowed out of dollar assets, US stocks underperformed global markets, and commodities with higher per-ton value outperformed, highly sensitive to the dollar index (measured by beta of stock indices to dollar). Early in the year, before the conflict, regions with high sensitivity to the dollar saw higher gains. Internally, US tech stocks were overtaken by infrastructure and small/mid-cap stocks, and US financials lost some dominance. After the conflict, the dollar index rebounded sharply, capital flowed back to the US, reflected in: US stocks showing resilience, while markets sensitive to the dollar declined more; commodities with higher per-ton value, like copper and aluminum, fell less than gold; combined with recent US AI industry catalysts, Nasdaq began to outperform Russell 2000 again. Within A-shares, similar to US tech supply chains, relative performance improved. The superficial reason is global stagflation and recession fears, but the real driver behind market performance may be the reallocation of dollar liquidity in financial assets.

The narrative of global physical assets rising is not over. To see the true picture, one must clear the dollar fog. Recommendations include: 1) Under global turmoil, energy security becomes crucial, with a focus on primary energy over secondary energy this year—mainly crude oil, oil shipping, coal, copper, aluminum, gold, and rubber; 2) China’s manufacturing remains the global ballast, with slow physical asset flows compared to financial assets, awaiting revaluation—power equipment, new energy, machinery, and chemicals; 3) As negative factors reverse, seek structural opportunities in consumption—tourism and scenic spots, fermented flavor products, beer and other alcohols, pharmaceuticals, and medical aesthetics.