March closing day, commercial space leads the charge, power tide recedes

The market is closed. Today is the last trading day of March, and also the quarter-end closing showdown. Across the entire market, 4,378 individual stocks fell, while only a handful of sectors—such as commercial aerospace, innovative drugs, and rail transit equipment—managed to hold up the tape.

I. Index performance and trading volume

As of the close, the Shanghai Composite Index fell 0.80% to 3,891.86 points. The Shenzhen Component Index fell 1.81%, and the ChiNext Index fell 2.70%. Total trading value on both exchanges was about 2 trillion yuan, slightly higher than yesterday. Around 4,400 stocks across the whole market fell, and the “losing money” effect was obvious. The indices surged then pulled back to finish lower, resulting in a broad sell-off and weak performance across the board.

II. Who is up today?

Commercial aerospace

The commercial aerospace sector continued to strengthen, becoming one of the few bright spots today. Shenjian Co. Ltd. advanced to a fourth consecutive daily limit-up. Transcent Technology advanced to three limit-ups in four days and hit a historical intraday high (it then reversed after a late-afternoon spike and fell back). Shunhao Co. Ltd., Shaoyang Hydraulic, and Juli Wire Rope all hit the daily limit-up. Aerospace Power, Zhongheng Design, and others also followed higher.

Catalyst factors: the successful first flight of the Lijian 2 rocket doubles as the market’s SpaceX IPO expectations, and institutional funds have continued to flow into this space.

Innovative drugs / healthcare (trend continues)

The innovative drugs theme became active again in the afternoon. Tianjin Pharmaceutical started a three-day streak of limit-ups. Wanbangde hit four limit-ups in six days. C-Lead (Cailaiying) reached the daily limit-up. Norskg, Chengda Pharmaceutical, and others also followed higher.

On the news front, the Karolinska Institute in Sweden has developed a new in vivo CAR-T cell generation technology, providing fresh ideas for cancer immunotherapy. In Q1, the BD contract package for innovative drugs has already exceeded $60 billion, and the cross-border expansion logic continues to be reinforced.

Rail transit equipment

Rail transit equipment strengthened. Shenzhou High-Speed Railway added a second consecutive limit-up. Shanghai Eagel Heavy Industry, Jinxi Rolling Stock Axle, and China Railway Engineering all hit the daily limit-up. The core drivers are the four combined logics: large policy-backed projects landing, a peak period for upgrading existing inventories, technological self-reliance, and overseas expansion.

The Fujian sector strengthened on policy expectation support. Pingtan Development, Minfa Aluminum, and Mindong Electric all hit the daily limit-up; also including the locomotive concept associated with Zhang Xuefeng, and others.

III. Who is down?

The power / green power sector collectively cooled off. The ultra-supercritical power generation sector fell as much as 3%. China Dian Environmental Protection fell more than 8%. Ningbo Energy fell nearly 10%. Jincao Power fell more than 7%. Earlier high-level stocks saw clear profit-taking and fund rotation. Some individual stocks also saw turnaround moves (“reverse packs”), but those reverse moves were more sell-oriented.

Semiconductors / chips led the decline. The Philadelphia Semiconductor Index fell more than 4% overnight, and sentiment transmission flowed into A-shares.

Lithium ores, coal, oil, and other sectors also weakened in sync.

IV. Market sentiment analysis

On the quarter-end closing day in March, there are several details worth noting:

First, the acceleration of “rotation between high and low.” The power sector, which had been popular earlier, saw a collective pullback. Meanwhile, commercial aerospace and automobile OEMs that started from low levels were being chased. Funds’ quarter-end rebalancing and stock rotation characteristics were evident.

Second, risk-avoidance sentiment warmed up. The bond market turned from falling to rising; the 30-year China government bond futures rose 0.38%, and the yield on 10-year U.S. Treasuries declined, showing that the global market’s pricing logic is gradually shifting from trading inflation to recession expectations.

Third, Q1 earnings pre-announcements began to heat up. Tianshan Aluminum’s Q1 earnings growth of 108% beat expectations and earned a one-word limit-up. Xinrui Shares projected 474%–604% growth. The earnings line is becoming a direction that funds use to filter stocks.

V. Expectations for tomorrow

First, commercial aerospace looks at Shenjian Co. Ltd. After four consecutive limit-ups, tomorrow is the “test-and-survive” day. If it can hold up, there may still be room for the sector. If it can’t, even a high-level consolidation without bad negative feedback is acceptable.

Second, innovative drugs looks at Tianjin Pharmaceutical. After three consecutive limit-ups, watch among the divergences who can hold up. In the medium-term, the overseas expansion logic is favored.

Third, automobile OEMs look at Yutong Bus. With low-level activation plus an earnings catalyst, tomorrow’s market should look for a premium, but at present, no clear continuation is visible.

Fourth, keep observing the power sector. In the early stage of the pullback, wait for stabilization signals and don’t chase bottoms aggressively.

Fifth, the Q1 earnings “earnings line” is worth paying attention to. Entering April, stocks with earnings that exceed expectations will become a safe haven for funds.

VI. A few final remarks

March is over. In this month, some people made money, some lost money, and some were toggling back and forth. But no matter what, you are still in this market, still willing to review and reflect, and still believe that there will be opportunities—that’s enough. Save your ammunition, preserve your fighting strength. After the rain of March is over, will the sunshine of April be far behind?

See you in April.