Hexun Investment Advisor Chen Xiujuan: Pre-market news roundup, can the A-shares hold steady on Tuesday?

Late-breaking developments roiled the market, and one of them drew especially high attention from Wall Street.

The first piece of news: Trump said the negotiations made major progress, but he also warned that if an agreement can’t be reached, he would completely destroy all of Iran’s power plants, oil wells, and Khark Island. His remarks have been inconsistent—on the one hand, he claimed a peace deal would be reached soon, and on the other, he continued to threaten strikes. Iran plans to implement a permit-and-fee system for vessels passing through the Strait of Hormuz, but as of now there are still no tankers transiting, and oil prices remain high. Iran has also never backed down, firmly stating it will retaliate against every aggressor. It’s clear that there are still major uncertainties in the Middle East situation, and the key negative factors have not yet been eliminated. However, for China’s A-share market, after last Friday, this Monday the Shanghai Composite Index opened lower and then rallied strongly to turn red again despite the backdrop of intensifying weekend tensions and a sharp drop in U.S. stocks. It weathered negative signals from outside markets for two straight days and delivered an independent trading pattern, showing that A-shares are gradually shaking off the impact of the conflict. This is a positive signal, and the market may slowly return to its own rhythm.

The second piece of news: China’s commercial space sector achieved a major breakthrough. The first flight of the Jianshen Two (Lijian II) was successful. Its cost is already basically on par with SpaceX’s Falcon 9, and if subsequent recovery is realized, costs can be cut by half again. This means China’s commercial space industry truly has global competitiveness. Combined with recent scheduling for multiple reusable rockets to queue up for test launches, commercial space is set to see a wave of concentrated catalysts. In the A-share market, last week, commercial space began to show unusual movements after new developments from a SpaceX IPO stimulated sentiment. This Monday, after the index opened lower and then surged before falling again as overall market sentiment weakened, commercial space once again moved unusually; afterward, the index stopped falling and rebounded, market sentiment warmed up, and several core stocks hit the daily limit. This theme has been showing frequent unusual moves recently, and it can resonate with the index when the market shifts from weak to strong. With many more event catalysts ahead, it’s worth looking for opportunities to buy on pullbacks.

The third piece of news: Feitian Moutai (600519) officially announced a price increase. After 8 years, at a time when overall liquor consumption has been sluggish, Maowang raised its retail guidance price by 40 yuan. At the same time, the sales contract price per bottle also increased by 100 yuan. This move is both part of Maowang’s own market-oriented transformation and aligned with the national policy of countering “involution.” It is a positive for both its short-term and long-term performance. If the market’s feedback is positive on Tuesday, watch whether the liquor and consumer-related sectors can see a round of oversold rebound.

On the opportunities side: By half an hour after the A-shares market opened on Monday, it had essentially absorbed the negative sentiment from overseas, indicating that there were incoming funds willing to take over as the market probed further downward. But as the index flipped back to positive, trading volume did not expand, suggesting that expectations for a continuous rally are not high. In the short term, we expect the market to mainly trade sideways and grind out a base. The power sector saw a wave of price-limit declines on Monday, which is quite damaging to momentum, making future operations more difficult. When there is a repair, pay attention to taking profit and reducing positions. The innovative drugs sector has logic support such as BD business above expectations, being oversold, and having no correlation with the conflict. Funds can more easily reach a consensus to go long; within that, there are names with both popularity and performance that are worth digging into on pullbacks. For new energy and computing power, we’ll continue to watch for rotation opportunities.

(Editor: Zhang Yan)

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