Yang Delong: Recently, A-shares have shown strong resilience, and the "bull turnaround" presents a good opportunity for strategic positioning.

Recently, affected by the Middle East conflict, global capital markets have seen a fairly large round of adjustments. The three major U.S. stock indexes have continued to fall, while the Japanese and South Korean stock markets saw a plunge at one point, but the A-share market has shown relatively stronger resilience. As the effects of long- and medium-term funds entering the market gradually become apparent, the market ecosystem for long-term investment is steadily improving. The A-share market is gradually taking on bottoming characteristics; market pullbacks, in fact, are an opportunity to enter. This adjustment is mainly driven by the external shock of the Middle East conflict, which has caused volatility in investor sentiment, and it has not changed the overall pattern of the A-share market’s slow bull transitioning into a long bull.

The fact that the A-share market has been able to move independently in recent days also reflects that the underlying logic behind this slow bull-to-long bull trend is very strong. The impact of geopolitical conflict on the A-share market is gradually weakening. The core factors affecting the A-share market are China’s domestic economic fundamentals, risk appetite, and the interest-rate level. At present, these factors have not undergone fundamental changes. In the long run, the A-share market is still on a trend of slow structural upward movement.

The Middle East conflict led to the blockade of the Strait of Hormuz, and international oil prices surged sharply for a time, with the increase nearly approaching 50% compared with the pre-war period. The rise in crude oil prices has pushed up global inflation expectations, exerting downward pressure on global risk assets. Before the conflict situation becomes clear, along with the uplift in inflation expectations, global equity markets are highly likely to continue with a high-volatility, range-bound adjustment pattern. Under external uncertainty, domestic fund flows have gradually stabilized, and policy-level support has effectively underpinned the resilience of the A-share market.

2026 is the first year of the “Fifteenth Five-Year Plan (2026–2030)”—in the opening year of the “15th Five-Year Plan.” Policy support for the capital market has also promoted a rebound in investor confidence. Introducing medium- and long-term funds into the market and promoting long money with long-term investment is conducive to improving certainty in the capital market. Meanwhile, domestic manufacturing has clear advantages, and in emerging industries such as humanoid robots and semiconductor chips, China has strong competitiveness—an important foundation for responding to external shocks. As annual reports and first-quarter reports’ results are released in concentrated fashion, sectors and individual stocks with strong earnings certainty and sustained improvements in business conditions have become the core directions that capital focuses on. Benefiting from the new-energy sectors such as power grid equipment and energy storage supported by the 4 trillion yuan investment during the “15th Five-Year Plan” period, as well as sectors like energy and non-ferrous metals—namely the directions in which heavy-asset sectors can still be developed vigorously in the AI era—have performed strongly since the start of this year. Investors can continue to pay attention to these heavy-asset, low-volatility sectors, which have substantial competitive strength.

In AI applications, China has unique advantages. In 2026, we will increase R&D investment and push forward faster localization. Semiconductor, communications equipment, computing power algorithms, mechanical equipment, commercial aerospace, and humanoid robot sectors are expected to deliver relatively strong performance.

On Monday evening, I had a conversation with Professor Liu Jipeng to discuss in depth the “4000-point defense battle.” Our views are highly consistent: we believe that breaking below 4000 points is a good time for investors who were previously on the sidelines (who missed the chance) to set up positions in high-quality stocks. The market adjustment has not changed the long-term upward trend of the A-share market. Falling below 4000 points is not the end point of the rally, but an important milestone in this slow bull-to-long bull cycle. Compared with the past two years when defending 3000 points, defending 4000 points now also proves that this slow bull-to-long bull trend has formed an upward direction, and the market’s focus continues to shift upward. In a low-interest-rate environment, the trend of household savings moving toward the capital market is becoming increasingly obvious. In the future, as the capital market strengthens, the fund-driven “ability to make money” effect will gradually improve, which will further attract more household savings to flow into the capital market either by buying funds or by opening accounts and investing directly. This is also the foundation for this slow bull-to-long bull trend to continue.

Looking longer term, China’s capital market is expected to become a place where residents can allocate capital to high-quality assets, as well as an important channel to obtain income from property. Capturing high-quality industries or high-quality companies that benefit from economic transition is an important aspect of sharing the results of economic transition and economic growth. Relative to that, A-shares and Hong Kong stocks are in valuation “pits” compared with global capital markets, while U.S. stocks’ valuations are far above. The risk of a pullback in U.S. stocks is increasing. Although U.S. tech stocks have technological leadership, valuations are too high, and the hidden concern that major declines could occur in the midst of a bull market still remains. U.S. stocks have risen for more than a decade, and now they also show signs of fatigue. This year, there have been multiple large adjustments, and investor confidence has been affected to some extent. The VIX volatility index surged sharply for a time recently, indicating that the Middle East conflict’s impact on U.S. stocks should not be underestimated. To prevent inflation from picking up again, the Federal Reserve has had to delay the pace of rate cuts and even consider rate cuts again toward year-end, which also creates negative impacts on the trajectory of U.S. stocks.

Crude oil prices are currently moving sideways at high levels; the subsequent trend will mainly depend on when the war ends. If the war can achieve a material ceasefire in April and the Strait of Hormuz gradually reopens, international oil prices may fall accordingly. But if the war cannot be concluded in April, oil prices may remain in a prolonged run at high levels. International gold prices fell sharply earlier. When discussing the sharp drop, I also mentioned viewing gold price fluctuations from the perspective of long-term allocation—every sharp decline is an opportunity to position. In fact, allocating 20% of gold-related assets in an investment portfolio is the most effective way to hedge against the erosion of fiat currency value; every sharp drop is a relatively good timing for positioning. Recently, as risk-avoidance sentiment has risen, international gold prices have rebounded strongly. Looking long term, gold is still an asset worth allocating to.

（The author is the Chief Economist and Fund Manager of Qianhai Open Source Fund）

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