When will A-shares bounce back after encountering "Black Monday"?

Invest in stocks with Golden Kylin Analyst Reports—authoritative, professional, timely, comprehensive—helping you uncover potential thematic opportunities!

Investors watch market trends at a securities firm. Photo by Xinhua News Agency.

The market fell below 3,900 points, broke through 3,800 points, then recovered above 3,800… On March 23, the A-share market staged a tense battle, with market sentiment hitting a freezing point. The Shanghai Composite Index fluctuated sharply downward, briefly falling below 3,800 points, hitting a new low since September last year.

On March 23, the three major A-share indices opened lower and declined throughout the day, each dropping over 4%. The Shanghai Index barely held above 3,800 points at the close. By the end of the trading session, the Shanghai Index fell 3.63%, the Shenzhen Component Index dropped 3.76%, and the ChiNext Index declined 3.49%. Total trading volume across Shanghai and Shenzhen was 2.43 trillion yuan, an increase of 144.7 billion yuan compared to the previous trading day.

Wind statistics show that only 305 stocks in the A-share market rose, while over 5,100 stocks declined (including 133 stocks hitting the daily limit down).

When will the correction end? Has the bull market already ended? When will the market rebound? These are the most pressing questions for investors right now.

Over 5,100 stocks declined

Gold prices plunged, gold stocks heavily hit

Yesterday, from a market perspective, themes such as computing hardware, AI applications, cloud computing, consumer electronics, semiconductors, cybersecurity, commercial aerospace, fintech, and humanoid robots all declined. Gold, base metals, airlines, tourism, agriculture, brokerages, and real estate sectors saw significant drops.

In the precious metals sector, Chifeng Gold hit the daily limit down, with Shan Jin International, CICC Gold, Shandong Gold, and Western Gold following suit.

On the news front, on March 23, London gold spot prices sharply declined during trading, breaking below the key support level of $4,400 per ounce, marking the longest consecutive decline since October 2023. Recently, international gold prices have experienced a cliff-like fall, with last week’s weekly decline reaching 10.49%, the largest weekly drop since March 1983.

Currently, the Middle East conflict continues to intensify, yet gold’s safe-haven effect appears to be failing. Industry insiders point out that in the short term, macro factors such as “global inflation heating up—high interest rates—strong dollar” have overshadowed traditional gold safe-haven logic. Coupled with capital behavior and technical adjustments, some funds that previously entered based on safe-haven logic are now showing signs of stop-loss exits, causing gold prices to fall instead of rise.

Rising crude oil prices have boosted expectations of interest rate hikes by central banks worldwide. Market concerns about “stagflation” risk. Technology growth stocks such as PCB, CPO, and memory chips are generally under pressure. Sanan Optoelectronics hit the daily limit down; Cambridge Technology, Huilu Ecology, Shenghong Technology, and others saw significant declines. Additionally, the tourism sector continued to adjust, with Three Gorges Tourism, Guilin Tourism, and Lingnan Holdings hitting the daily limit down.

Middle East tensions persist

Coal and green energy stocks defy the trend and rise

Yesterday, despite over 5,100 stocks falling, coal, green energy, and space photovoltaic sectors bucked the trend and gained.

Coal stocks performed actively, with Yunmei Energy and Liaoning Energy hitting the daily limit up. News indicates that the risk premium for the Strait of Hormuz continues to ferment, international oil prices remain high, and coal stocks are favored by funds again. On March 23, the National Development and Reform Commission announced temporary measures to regulate domestic refined oil prices. In recent years, fuel prices have been adjusted under the current mechanism, and this is the first such regulation since 2013.

CITIC Securities released a research report stating that the Middle East geopolitical conflict has lasted over three weeks, and the sustained rise in international oil and gas prices indicates ongoing momentum. Although short-term demand for thermal coal faces a seasonal lull, chemical coal demand may continue to release, supporting coal prices to stabilize and rebound. The price of coking coal is also expected to rise amid short-term demand improvement. With overseas support, the outlook for domestic coal prices remains optimistic.

Green energy stocks defied the trend, with Huadian Liaoning Energy hitting six consecutive daily limit-ups, doubling since March. Dongfang New Energy (rights issue) hit four daily limits in six days, and Lianxin New Energy hit two limits in three days.

Guojin Securities’ research report states that the ongoing escalation of Middle East tensions, along with higher terminal electrification and renewable energy utilization, will be the only way for most (oil and gas resource-deficient) countries to enhance energy security. The conflict may accelerate government policies and orders for related sectors, including equipment manufacturers. Focus on energy storage, power grid equipment, and space photovoltaic sectors that resonate with long-term demand driven by computing power and energy independence.

Space photovoltaic concept stocks are active locally, with Huamin Shares hitting the daily limit up by 20 cents, Tuori New Energy, Xineng Technology, Lianxin New Energy, and Zhejiang New Energy all hitting the limit. News indicates that Tesla’s in-house chip factory “Terafab” project is about to start. On March 21, Elon Musk revealed on social media that the project aims to produce over 1 terawatt of computing capacity annually, with about 80% for space applications and 20% for ground use.

Market outlook

A-shares remain in

Narrative Battle Stage

招商证券 (CMB International Securities) points out that, based on technical patterns and sentiment indicators, the current A-share market is in the latter part of this decline. Further sharp drops are limited, but external shocks could still cause phase volatility. Confirming the bottom will take time and space. The key signal for a bottom is when the market’s stabilization mechanisms start to act substantively.

CITIC Securities believes that many core questions about the impact of Middle East conflicts will be answered gradually after April. The market’s key issues will be clarified in April, and until then, the market remains in a narrative battle stage, reflecting liquidity withdrawal. It is recommended to maintain core positions in new energy, chemicals, electric power equipment, and non-ferrous metals.

Huaxi Securities notes that last week, most global stock markets declined, with A-shares and European markets leading the fall. Uncertainty remains over US-Iran geopolitical tensions, oil prices, and inflation trends, increasing the risk of stagflation. The Federal Reserve’s March meeting kept interest 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, with trading volumes shrinking. In a sector rotation environment, defensive sectors like food and banks, as well as high-growth areas like storage and AI computing power, performed relatively better.

HuaAn Securities states that ongoing tariff risks abroad, unresolved US-Iran tensions, and inflation worries have led the Fed to turn hawkish. Domestic policies are unlikely to be significantly loosened given strong economic data. The market is expected to remain weak and volatile. Short-term, assets like banks, utilities, and sectors with price increase catalysts such as chemicals, machinery, and storage may continue to outperform. Growth stocks remain the mid-term main line but are still in a correction phase. After adjustment, the market may enter a second phase of profit-driven bull market, so this correction is considered healthy.

Long-term, Great Wall Fund suggests that key points to watch are: first, easing of geopolitical tensions; second, decline in oil price volatility; third, sustainable industry catalysts and improved risk appetite. From a long-term perspective, China’s supply chain remains stable, with ample oil reserves, making high oil prices less disruptive domestically and enhancing resilience. After short-term emotional declines, risks are gradually released, and long-term funds may start to deploy, so excessive pessimism is unwarranted.

Galaxy Securities believes that the duration and evolution of geopolitical conflicts remain uncertain, and short-term volatility in global risk assets will persist. Under the main logic supporting China, the downside for A-shares is limited, and the market is likely to digest external pressures through oscillation and sector rotation. Market focus remains on inflation dynamics, with oil price movements under geopolitical tensions being a key variable affecting recent market structure.

News Analysis

What happened to Asia-Pacific markets today?

Yesterday, Asia-Pacific stocks sharply declined. The Nikkei 225 fell 3.48%, and the KOSPI dropped 6.49%.

Affected by multiple factors, the overall performance of the Chinese market was weak. The Shanghai Composite Index fell 3.63%, the Shenzhen Component Index down 3.76%, the ChiNext Index declined 3.49%, and the STAR Market Index dropped 4.93%. The Hang Seng Index fell 3.54%, and the Hang Seng Tech Index declined 3.28%.

Market analysis indicates that yesterday’s weakness was driven by Middle East geopolitical tensions, soaring international oil prices, reversal of Federal Reserve policy expectations, adverse impacts from some sectors, and other factors. Gold prices weakened significantly, dragging down gold stocks; coal and oil & gas sectors showed countertrend activity, but sector performance was highly differentiated.

Most domestic commodity futures closed higher, with many energy and chemical products hitting daily limits—propylene up over 12%, rubber, liquefied gas, coking coal, plastics, and polypropylene hitting limits; methanol up over 8%; crude oil up over 7%; coke nearly 7%; PVC, short fiber up over 6%; asphalt, caustic soda, and soda ash up over 4%.

As of 15:16 Beijing time, COMEX gold futures fell 8.18%, COMEX silver futures down 10.24%, London gold down 8.14%, and London silver down 10.15%.

Notably, near the close, several broad-based ETFs saw increased trading volume. At the close, ETFs like Huatai-Pbrr’s CSI 300 ETF and Southern’s CSI 500 ETF traded over 5.1 billion yuan.

Last night, following Trump’s statement that “the US and Iran have had very good and productive talks over the past two days,” international oil prices plummeted. As of 19:10 on the 23rd, NY crude was at $85.66, down 12% intraday; Brent crude was at $94.33, down over 11%.

Gold prices rebounded, with spot gold’s decline narrowing, and spot silver turning higher.

US stock futures rebounded sharply, each up over 2%, after earlier plunging collectively.

European markets quickly recovered, with France’s CAC40 rising nearly 1.5%. Futures for FTSE China A50 and MSCI China A50 Interconnect also rose about 1.5%.

According to Xinhua News Agency and China Securities Journal

Invest with caution—risks are present.