Main A-share indices fluctuate and adjust, with the lithium battery materials sector strengthening.

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| \| \| \| — \| \| 　　Lithium Battery Index daily K-line chart 　　Zhang Dawei, charting \| | | — | — | — | — | — | — |

◎ Reporter Wang Youruo

On March 26, China’s A-share market saw choppy consolidation and adjustments, with major indices all falling by more than 1%. By the close, the Shanghai Composite Index was at 3,889.08 points, down 1.09%; the Shenzhen Component Index was at 13,606.44 points, down 1.41%; the ChiNext Index was at 3,272.49 points, down 1.34%; and the STAR Market Composite Index was at 1,637.57 points, down 1.83%. The combined trading value of the three markets in Shanghai and Shenzhen (including the Beijing market) totaled 1.956968 trillion yuan, the first time since March it fell below 2 trillion yuan, and also the lowest single-day trading value this year.

Yesterday’s trading, individual stocks saw fewer advancers than decliners, and market hot spots rotated quickly. The power sector remained active against the trend, with Hunan Development achieving three consecutive daily limit-up boards. Huadian Energy reached the daily limit-up, and the stock closed at 6.77 yuan per share; since March, the cumulative gain on the stock has reached 148.9%. Earlier, the leading concept stock Huadian Liaoneng had at one point hit the daily limit-up intraday, but toward the close its gain narrowed to 6.47%.

The lithium battery materials sector repeatedly strengthened, with multiple segments such as electrolytic liquid, separators, and lithium mines performing actively. Rongjie Co., Ltd. achieved three consecutive daily limit-up boards, and multiple stocks including Shida Shenghua, Lida New Materials, and Datongnan also hit the daily limit-up.

A research report published by Huatai Securities’ Power Equipment and New Energy team stated that every global energy crisis is an opportunity for energy transition. While the Middle East geopolitical conflict this time has brought energy price shocks, it has also highlighted the importance of energy security. Huatai Securities believes that energy security mainly relies on localization and diversification. The energy transition will bring increased electrification locally and a reduced reliance on imports. New energy will again become the choice for development in countries worldwide. Therefore, it is optimistic about the two major investment themes of lithium batteries and energy storage.

The CPO concept saw a spike and then a pullback on March 26. The popular stock Source Gen Tech had once risen by more than 5%; its share price peaked at 1,212.49 yuan per share, setting a new all-time high in the process, and the intraday total market value broke the 100 billion yuan threshold. However, by the close the stock swung and turned green, with a slight decline of 0.09%; since the beginning of the year, the cumulative gain on the stock is about 77%. In addition, Mingtong Optoelectronics hit the daily limit-up, Zhili Fang rose by nearly 9%, and multiple other stocks such as Telfut Communication and Changguang Huaxin performed actively.

On the downside, sectors including insurance, photovoltaic equipment, communications services, software development, precious metals, and diversified finance saw larger adjustment declines.

Looking ahead, China Merchants Securities analysts believe that, from both technical formations and sentiment indicators, A-shares are already in the latter half of this round of declines, leaving limited room for further large downside. However, external shocks may still trigger phased volatility. After the adjustment ends, investors are advised to focus on three major core allocation directions: first, resource stocks that benefit from geopolitical disruption premium and domestic inventory replenishment demand; second, AI infrastructure—areas such as computing power and data centers, as well as supporting power supply—are expected to benefit from policy-driven momentum and industry trend alignment; third, the new energy sector—in the context of strengthened energy transition target goals—this theme has both the long-term policy support and demand growth logic.

A strategy research report released by Shenwan Hongyuan Securities on March 26 said that under the Middle East geopolitical conflict, China’s energy and supply-chain security advantages are becoming evident: from a total-quantity perspective, China’s relatively higher energy self-sufficiency rate is the “stabilizing anchor” for responding to geopolitical conflict; external energy supply being dispersed provides resilience to China’s energy supply; and China’s advanced manufacturing advantages have also made a positive contribution toward energy being independently controllable and secure.

Shenwan Hongyuan Securities’ research report further analyzed that: from a micro perspective, the balance of A-share investment and financing functions has been significantly optimized. Corporate governance of A-share listed companies and shareholder returns have improved markedly. With an increase in the appeal of long-term capital to the A-share market, allocations to A-shares have also risen. Overall, the fundamental base for healthy development of the A-share market has not changed. Looking ahead, the probability remains relatively high that the 2026 A-share fundamentals will improve in a cyclical manner. It is expected that in 2026, the trend of effective recovery in A-share profitability and a steady quarter-by-quarter rise in cumulative profits year over year will remain unchanged, and the mid-term upward market for A-shares has a fundamental basis.

“The advantages of China’s economy are becoming more prominent, and the long-term favorable trend in China’s capital markets has not changed. Rapid changes in liquidity are not the norm for the A-share market, and some short-term issues have already been over-interpreted as mid-term concerns. At present, the market may be at the point of greatest pressure. Investors are advised to remain firmly confident and stay patient.” Shenwan Hongyuan Securities’ research report said.

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Responsible editor: Zhao Siyuan