Collective plunge! Asia-Pacific stock markets, "Black Monday"

Asia-Pacific stock markets encounter “Black Monday.”

On March 23, Asia-Pacific markets collectively plunged, with the Nikkei 225 down 3.48% and the Korea Composite Stock Price Index falling 6.49%.

Both A-shares and Hong Kong stocks declined, with the Shanghai Composite Index dropping over 4% intraday and briefly losing the 3,800-point level; the Sci-Tech Innovation Board Index also fell over 5%. The Hang Seng Index and Hang Seng Tech Index both declined over 4% in the afternoon.

Specifically, major stock indices in both markets moved sharply downward during the day, accelerating in the afternoon. By the close, the Shanghai Composite fell 3.63% to 3,813.28 points, the Shenzhen Component Index dropped 3.76%, the ChiNext Index declined 3.49%, and the Sci-Tech Innovation Board Index fell 4.93%. The combined turnover of the Shanghai and Shenzhen markets was about 2.45 trillion yuan, up approximately 145 billion yuan from the previous day.

Nearly 5,200 A-shares declined, with over 140 hitting the daily limit down. Semiconductors, pharmaceuticals, real estate, non-ferrous metals, insurance, brokerages, and banks all declined; coal stocks rose against the trend, with YunCoal Energy and Liaoning Energy hitting the daily limit up. The power sector was relatively active, with Huadian Liaoning Energy (600396) achieving six consecutive limit-ups; some photovoltaic industry chain stocks performed strongly, including Zhejiang New Energy, Tori New Energy, and Chint Power, all hitting the daily limit. Notably, BYD surged significantly during the session, rising over 8% at one point and closing up more than 4%.

Regarding the outlook, Guotai Haitong Strategy team believes that stability is scarce, and the Chinese market has a lower risk premium. The growth logic is breaking the “stagflation” narrative, with China’s market becoming more diversified. The Russia-Ukraine conflict and US-China tariff disputes show that after emotional peaks, market direction depends on endogenous logic. The decline in risk-free yields in China, financial market reforms, and economic structural transformation are the fundamental drivers and pillars of China’s “transformation bull” market.

Zheshang Strategy notes that China’s energy self-sufficiency rate has reached 85%, far higher than Japan and South Korea’s approximately 15%. This makes A-H shares more resilient under geopolitical spillover effects. China’s energy structure grants it stronger supply resilience; building an industrial cost “safety cushion” gives China an advantage over traditional manufacturing powers like Japan, South Korea, and Germany, which rely heavily on oil and gas imports. China’s relatively stable energy security and industrial system could become a “safe haven” for global capital. The rising crude oil price center may amplify the vulnerability of high valuations in Japan and South Korea’s stock markets.

Additionally, international precious metal prices plunged sharply. As of the report, COMEX silver fell over 11%, COMEX gold dropped more than 10%, spot silver declined nearly 8%, and spot gold fell over 6%.

Financial Sector Declines

Insurance, banking, and brokerage sectors collectively declined during the day. By the close, China Life Insurance fell over 5%, while CITIC Securities, CICC, Everbright Securities, and Agricultural Bank of China all declined about 4%.

Recently affected by geopolitical conflicts, the insurance and brokerage sectors continued their adjustment trend. On March 18, the central bank stated it would firmly maintain the stability of stock, bond, and foreign exchange markets. Open Source Securities noted that the medium-term logic for insurance and brokerages remains unchanged; deposit migration and a slow bull market create long-term positive prospects for non-bank businesses and asset sides. Industry sentiment is improving, with valuation metrics for five A-share insurers falling to a low of 0.73 P/EV, and top brokerage firms’ PB and PE ratios at historic lows. In the short term, they may show defensive characteristics, with opportunities on the left side of the market, especially with quarterly reports approaching.

For banks, Wanlian Securities states that domestic monetary and fiscal policies continue to support stable growth, with ample liquidity. External geopolitical risks cause market volatility, leading to a short-term decline in overall risk appetite, which benefits defensive assets. Policy reforms expected in 2026 may facilitate a smooth transition between old and new growth drivers. The high-dividend style remains temporarily attractive. Considering current dividend yields and valuation levels, the banking sector still offers allocation value.

Coal Sector Rises Against the Trend

Coal stocks rose against the trend during the day. By the close, YunCoal Energy and Liaoning Energy hit the daily limit up, Shanxi Coking Coal rose over 9%, Zhengzhou Coal & Electricity increased nearly 7%, and Pingmei Shares gained nearly 6%.

The industry was affected by overseas geopolitical conflicts, reduced coal imports from Indonesia, and rising import costs, which improved shipping demand. International coastal coal freight rates continued to rise, and recent domestic coal prices have started to increase due to overseas geopolitical developments. Data shows that as of March 20, the Qin港Q5500 thermal coal price was 735 yuan/ton, up 6 yuan from the previous period. For coking coal, as of March 20, the main coking coal price at JingTang Port was 1,620 yuan/ton, rebounding from a low of 1,230 yuan in early July 2025; coking coal futures also rebounded from 719 yuan in early June to 1,171 yuan, a nearly 63% increase.

CITIC Securities points out that since the Middle East conflict began three weeks ago, domestic coal prices have performed below expectations, but overseas oil and gas prices have continued to rise, outperforming the period of the Russia-Ukraine conflict. The impact of the Middle East conflict on global coal supply contraction is gradual; sustained high oil and gas prices are expected to boost global high-calorie coal consumption, raising the coal price center in Asia-Pacific and benefiting domestic coal price expectations.

The firm believes three short-term factors will support steady increases in thermal coal prices: 1) improved chemical profits may boost coal demand; 2) industry data from the first two months of the year show improvement, suggesting better-than-expected fundamentals; 3) ongoing conflicts keep overseas coal prices at a premium. Additionally, coking coal prices are expected to remain stable or rise due to inventory replenishment and improved coking profitability.

Huadian Liaoning Energy Hits Six Consecutive Limit-Ups

Huadian Liaoning Energy (600396) again hit the daily limit-up today. The stock closed at 6.89 yuan per share, with over 260,000 buy orders at the limit. This marks six consecutive trading days of limit-up.

The company announced on the evening of the 20th that its stock experienced five consecutive limit-ups from March 16 to 20, with a cumulative deviation of 64.72% in closing prices, significantly diverging from the broader market and industry. Investors are advised to be cautious of trading risks, make prudent decisions, and invest rationally. The company confirmed that its operations are normal, mainly engaged in thermal power generation, with thermal power capacity accounting for 82.56%. No major changes have occurred in daily operations, costs, or sales, and no significant policy or market environment adjustments have impacted production or management.

Proofread: Xu Xin