A-shares Market Close | Turnover drops below 2 trillion! The Shanghai Composite Index falls back below 3,900 as A-shares adjust. Is the Middle East situation no longer the sole "scapegoat"?

Global investors are closely monitoring the developments in Iran!

According to the latest news, the Israel Defense Forces announced on the 26th local time that they had launched a series of large-scale attacks on infrastructure in Isfahan, Iran. On the same day, Hezbollah claimed to have attacked the headquarters of the Israeli Ministry of Defense with multiple missiles. However, U.S. President Trump has been reported to wish for a quick end to the war.

Affected by this news, U.S. stock futures and the Asia-Pacific markets collectively plunged in the afternoon, oil prices surged, and gold and silver fell. In the A-share market, the market fluctuated and adjusted, with the three major indices dropping more than 1% throughout the day, and the Sci-Tech 50 Index dropping over 2%. By the close, the Shanghai Composite Index fell by 1.09%, the Shenzhen Component Index fell by 1.41%, and the ChiNext Index fell by 1.34%. The total trading volume of the Shanghai and Shenzhen stock exchanges fell below 2 trillion yuan, a decrease of 236.2 billion compared to the previous trading day.

It is noteworthy that institutions on Wall Street are raising their expectations for a recession in the U.S., partly due to the risks of the Iran war and inflation. Market analysis suggests that while the situation in the Middle East (the Israeli attack on Isfahan) is a trigger for the global market plunge, it is no longer the only “scapegoat.” The market logic has subtly changed:

Previously: Hearing explosions → Buying gold, buying oil.

Now: Hearing explosions → Worrying that oil prices will spike and trigger secondary inflation → Worrying that the Federal Reserve will maintain high interest rates longer (even raise rates) → Selling risk assets (stocks).

On the market, the oil and gas sector once again rose in the afternoon, with Blue Flame Holdings hitting the daily limit; the lithium battery industry chain strengthened across the board, with lithium mines, electrolytes, solid-state batteries, and other directions showing performance, and stocks like Rongjie Co. and Shida Shenghua hitting the daily limit; the power sector fluctuated and rose, with Huadian Liaoning Energy, Jinkong Electric Power, and Guangxi Energy hitting the daily limit; innovative drug concept stocks rose in the morning, with Sitai Li and Minuo Hua hitting the daily limit; the commercial aerospace sector was active again, with Shenjian Co. and Zhongchao Holdings hitting the daily limit.

On the downside, insurance stocks fluctuated and fell, with China Life dropping nearly 5%, and Xinhua Insurance, China Pacific Insurance, and China People’s Insurance all dropping over 3%; wind power and photovoltaic equipment continued to adjust, with Zhonghuan Hailu and Guosheng Technology hitting the daily limit or dropping over 10%; the precious metals sector fluctuated lower, with Xiaocheng Technology and Sichuan Gold dropping nearly 5%; the military industrial sector corrected, with Beifang Changlong and Inner Mongolia Yijian dropping over 5%; the optical fiber and optical module concept weakened, with Farsen hitting the daily limit; the grid equipment concept continued to adjust, with Shunna Co. hitting the daily limit; the computing power leasing concept fell, with Diguang Technology hitting the daily limit.

Looking ahead, CITIC Construction Investment stated that under global risk appetite disturbances and domestic market funding constraints, the A-share market may still maintain a fluctuating pattern in the short term. However, if the U.S.-Iran conflict becomes long-term, it may create strategic opportunities for China, which, relying on the dual-pillar energy base of “coal + new energy,” can not only guarantee its own energy security but may also become a leader in the global energy transition.

Hot Sectors

1. Battery industry chain rises across the board

The lithium battery industry chain strengthened across the board, with lithium mines, electrolytes, solid-state batteries, and other directions showing performance, and stocks like Rongjie Co. and Shida Shenghua hitting the daily limit.

Commentary: On the news front, the latest data from the China Automotive Power Battery Industry Innovation Alliance shows that from January to February 2026, China’s power and energy storage battery exports reached 48.0 GWh, a year-on-year increase of 24.6%, with energy storage battery sales increasing by 108.9% year-on-year.

2. Chemical sector continues to rebound

The chemical sector continues to rebound, with Xinghua Co. and Bohai Chemical hitting the daily limit.

Commentary: On the news front, on Wednesday local time, global chemical giant BASF announced that due to rising costs from the U.S.-Israel-Iran war, it would increase prices on more products. BASF stated that it would raise prices on its basic amine product portfolio in Europe, with increases of up to 30%, and some products may see even higher price increases.

3. Innovative drug concept stocks maintain strength

Pharmaceutical stocks rose during the day, with Minuo Hua hitting three consecutive daily limits, and Wanbangde and Haisen Pharmaceuticals hitting the daily limit.

Commentary: Guoxin Securities emphasized that the clinical development of domestic innovative drugs is progressing smoothly, with multiple excellent clinical data recently released at academic conferences, and suggested focusing on key meetings such as ASCO in the second quarter.

4. Commercial aerospace concept active

The commercial aerospace concept saw partial rises, with Shenjian Co., Zhongchao Holdings, Western Materials, and Zaisheng Technology hitting the daily limit.

Commentary: On the news front, SpaceX plans to submit its initial public offering prospectus to regulators later this week or next week. The company is expected to raise over $75 billion in the IPO, higher than the previously reported estimate of $50 billion, with its latest valuation at $1.25 trillion.

Institutional Views

CITIC Construction Investment: The Middle East situation has far-reaching impacts, and China is facing strategic opportunities

As the U.S.-Iran conflict enters a stalemate, crude oil prices are highly volatile. The diversification of China’s crude oil imports, energy structure transformation, and strategic petroleum reserves will also play a buffering role. However, under global risk appetite disturbances and domestic market funding constraints, the A-share market may still maintain a fluctuating pattern in the short term. If the U.S.-Iran conflict becomes long-term, it may entail three major impacts: 1) An upward shift in oil price centers, global inflation heating up, and interference in the Federal Reserve’s interest rate cuts; 2) Accelerated loosening of the petrodollar system, with China likely becoming a global capital safe haven, potentially benefiting from RMB assets; 3) It may create strategic opportunities for China, leveraging the dual-pillar energy base of “coal + new energy” to not only secure its own energy safety but also possibly lead the global energy transition. Key industries to focus on: coal, coal chemical, power equipment, public utilities, oil and petrochemicals, AI industry chain, etc. Themes to focus on: lithium batteries, nuclear power, energy storage, wind power, etc.

Guojin Securities: In the long term, gold is expected to enter a new bull market

Guojin Securities pointed out that historical experience shows that gold typically performs well in stagflation environments, but the current market had previously concentrated on pricing inflation factors while neglecting the “stagnation” pressures. The U.S. economy has shown signs of weakening growth, and high oil prices may further accelerate the arrival of recession. If economic stagnation resonates with capital market downturns, liquidity expectation differences may become a trigger for gold rebounds. In the long term, the consensus in the market is that the comprehensive national strength of the U.S. is shifting from prosperity to decline, and gold is expected to enter a new bull market.

Guotai Junan: Oil prices stimulate overseas demand for new energy vehicles; optimistic about independent brands going abroad

Guotai Junan Securities’ research report stated that in this round of oil price cycle, the economic advantages of HEVs (hybrid electric vehicles), PHEVs (plug-in hybrid electric vehicles), and BEVs (pure electric vehicles) have expanded, which is expected to drive their penetration rates in high oil price regions, providing opportunities for independent brands to export. According to data from the China Automobile Association, from January to February 2026, China’s passenger car export volume increased by 53.3% year-on-year, and new energy vehicle exports increased by approximately 110% year-on-year. With the global oil prices remaining high in March, the annual new energy export expectations are likely to be revised upward. Recommended core targets among independent brands with overseas potential.

This article is reproduced from “Tencent Self-Selected Stocks,” edited by Zhitong Finance: Jiang Yuanhua.