Shanghai Composite Index hits 4,000 points then recovers, focusing closely on the growth enterprise board's performance certainty main line

Why Do Performance-Driven Stocks on the ChiNext Board Favor During Adjustments?

On March 19, the major stock indices in both markets fell across the board, with the Shanghai Composite Index briefly dropping below 4000 points, and the Shenzhen Component Index falling over 2%, with more than 4900 stocks in the red. Overall, the market structure showed clear differentiation that day, with the energy chain and technology growth sectors performing relatively strongly, while cyclical sectors experienced significant adjustments influenced by commodity price fluctuations. Industry insiders believe that the core logic supporting this round of market uptrend has not fundamentally reversed, and it is possible to position around performance-driven stocks within the ChiNext index constituents.

External Disturbances Boost Oil and Gas Stocks

On Thursday, the three major A-share indices opened lower and fluctuated in response to declines in the external market. Energy stocks opened higher due to an overnight rise in oil prices, but other sectors were relatively weak, with gold and non-ferrous metals leading the declines. The Shanghai Composite Index temporarily fell below the 4000-point mark but recovered towards the end of trading. The Shenzhen Component Index fluctuated near the 60-day moving average, while the ChiNext Index maintained strong fluctuations above all moving averages, with the structure remaining intact.

Although the market adjusted, active selling pressure did not emerge. By the end of trading, the Shanghai Composite Index fell 1.39%, closing at 4006.55 points; the STAR 50 Index dropped 2.44%, closing at 1339.03 points; the Shenzhen Component Index fell 2.02%, closing at 13901.57 points; and the ChiNext Index declined 1.11%, closing at 3309.1 points. According to Wind data, 505 stocks rose in both markets and the Beijing Stock Exchange, while 4955 stocks fell. The total transaction volume in the Shanghai and Shenzhen markets was 21.11 billion yuan, an increase of 650 million yuan compared to the previous trading day.

In terms of popular concepts, the optical module (CPO) index saw the largest gains. On the news front, global demand for AI computing power continues to rise. Recently, Alibaba Cloud and Baidu Smart Cloud announced increases in AI computing power service prices, further enhancing the certainty of demand in the upstream optical module segment of the industry chain. The coal mining selection index rose 1.01%. The central enterprise coal index rose 0.82%, with constituent stocks China Shenhua up 3.10% and China Coal Energy up 2.91%. Ongoing geopolitical conflicts in the Middle East have escalated, raising global oil and gas supply concerns, with Brent crude futures prices remaining above $106 per barrel, having previously tested the $110 per barrel mark, driving funds into oil and gas and related energy industry stocks.

Multiple Favorable Factors Still Support the Market

After repeated fluctuations, the market is expected to experience the final dip of this round of adjustments. Although the Shanghai Composite Index briefly broke through the 4000-point mark towards the end of trading, it ultimately recovered, and the low point of the current small C wave has not yet been confirmed, indicating that the market is still in a bottom-seeking process. Market participants believe that after extreme emotional reactions, a rebound from the bulls is likely not far off.

Zhu Jinjing, a strategy analyst at Hualong Securities, stated: “Against the backdrop of geopolitical disturbances, there are still multiple favorable factors supporting the market’s steady operation. First, economic resilience is strong. In terms of investment, all parties are seizing opportunities to promote the commencement of major projects, driving a rebound in investment. Second, policy expectations are stable. The 2026 government work report proposed to continue deepening comprehensive reforms in capital market investment and financing, further improving the mechanism for long-term capital entering the market and enhancing investor protection systems. Third, uncertainties are gradually being priced in by the market.”

Chen Yuheng, a senior investment advisor at Jufeng Investment Consulting, believes: “This adjustment in A-shares is not an isolated event, but rather an intense game between external shocks and internal resilience against a backdrop of profound changes in global market expectations. It is worth emphasizing that the core logic supporting this round of market uptrend—the steady recovery trend of the domestic economy, continued support from macro policies for the capital market, and the endogenous driving force of industrial transformation and upgrading—has not fundamentally reversed. This suggests that the current adjustment is more of a phase-based, structural reassessment rather than a trend-based bull-bear transition. It is just that under the short-term pressure of multiple disturbing factors, the market needs time to digest selling pressure and find a new balance. Investment opportunities can be positioned around performance-driven stocks within the ChiNext index constituents, such as AI computing power, optical modules, new energy, pharmaceuticals and healthcare, industrial automation, high-end manufacturing, internet finance, software, etc.”

Reporter: Huang Du