A-shares assets are relatively resilient; April allocations will further focus on certainty

In the past week, the three major indices of A-shares exhibited a fluctuating trend of initially declining and then rising, with an accelerated rhythm of sector rotation and significant characteristics of stock market speculation. In this regard, the brokerage strategy outlook report analysis for this week believes that the geopolitical conflict in the Middle East remains a core disruptive factor for global markets recently. In the short term, its aftershocks have not yet completely dissipated, and the market tone will primarily be focused on digesting fluctuations. However, from a medium- to long-term perspective, the adjustment in the A-share market has been relatively sufficient, and the intrinsic certainty of China’s economy and manufacturing industry is continuously highlighted, which is expected to support the resilient performance of the A-share market.

CITIC Securities judges that in the short term, the geopolitical conflict in the Middle East may present a subtle balance, but the situation of supply chain disruptions has not changed. The acceleration of global electrification, the shift of orders from overseas to domestic markets, and supply chain security are three directions worth paying attention to in the subsequent market. From the perspective of derivative indicators, the most fearful stage of the market may have already passed. Due to the difficulty in quickly resolving the geopolitical conflict in the Middle East, funds lacking patience or seeking to avoid losses tend to reduce their positions during rebounds to avoid volatility. Based on historical experience from April 2025, the recovery of market sentiment and liquidity may take several months. In terms of allocation, investors are advised to continue holding onto China’s advantageous manufacturing sector and patiently await a decision in April.

Zhongtai Securities stated that the escalation of the geopolitical conflict in the Middle East and stagflation trading is the main line of trading for A-shares in March. From the performance of various sectors: the differentiation within technology assets has intensified, with significant resilience in upstream sectors such as telecommunications and power equipment; in cyclical assets, the energy chain has strengthened against the trend, while pro-cyclical industrial varieties have seen a significant retraction of previous excess returns; the defensive attributes of dividend sectors have become prominent. Looking ahead, Zhongtai Securities believes that the market may still face fluctuations in the short term, but there is no risk of a systemic large-scale decline in the index, and adjustments present opportunities for positioning.

“A-shares are still in a medium- to long-term upward cycle; we are currently only in the adjustment phase after the ‘first stage of increase,’ and the ‘second stage of increase’ is a matter of time, not possibility,” wrote Shenwan Hongyuan Securities in their report.

Shenwan Hongyuan Securities believes that energy security and supply chain security are the foundations for maintaining overall stability in the Chinese capital market. Meanwhile, the fundamental basis for the healthy development of the A-share market remains unchanged. The balance of A-share investment and financing functions has significantly optimized, and the improvement in the quality of listed companies has made the sources of investment returns richer. Once external disruptive factors ease, the A-share market will return to a path of accumulating profit effects.

In terms of specific allocation, Industrial Securities summarizes the market’s main line as “three certainties”: first, sectors with strong performance certainty and robust prosperity logic, represented by computing power chains (telecommunication equipment); second, with the upward shift of the oil price center, directions with strong certainty for energy substitution and price transmission, such as the new energy industry chain (batteries, new energy vehicles, photovoltaics, wind power, power grids), coal, public utilities (electricity, gas), and agricultural products; finally, directions led by domestic demand and defensive certainty, such as banking, food and beverage, and infrastructure.

China Galaxy Securities also suggests that investors focus on sectors with high performance certainty and continuously improving prosperity. The agency stated that under external uncertainties, the certainty advantage of domestic manufacturing is highlighted, strongly supporting the resilience of the A-share market. The main lines of energy security, controllable autonomy, and industrial upgrading are clear, possessing stronger defensive attributes and cost-effectiveness for allocation. Additionally, entering April, as annual reports and first-quarter results are disclosed, sectors with high performance certainty and continuously improving prosperity will become the core focus of funds.