Over 4,700 stocks declined! The A-share market's trading volume hit a new low for the year, institutions: Expecting measures to stabilize the market

Ask AI · Why is the repeated Middle East conflict intensifying the volatility of the A-share market?

Our newspaper (chinatimes.net.cn) reporter Shuai Kecong Beijing reports

On April 3, 2026, the last trading day before the Qingming holiday, the three major indices of the A-shares collectively closed lower, with the Shanghai Composite down 1% to 3,880 points, once again losing the 3,900-point threshold. The daily trading volume sharply shrank to about 1.67 trillion yuan, hitting a new low for the year.

Yang Delong, chief economist at Qianhai Kaiyuan Fund, told Huaxia Times that recently, due to the unpredictable fluctuations of the Middle East conflict, the overall trend of the A-share market has shown oscillation and adjustment. This is a critical period, and there is hope for the quick introduction of stabilization measures. If institutional funds and quasi-market stabilization funds can act in time, it can both boost market confidence and reverse the downward trend, and the market may continue the previous slow bull or long-term bull trend.

Shanghai Composite Index once again falls below 3,900 points

On April 3, the three major A-share indices opened high and then declined, with slight rebounds during the session, but ultimately failing to reverse the downward trend. The Shanghai Composite broke below 3,900 points, and overall market sentiment was poor.

By the close, the Shanghai Composite fell 1% to 3,880.1 points; the Shenzhen Component Index dropped 0.99% to 13,352.9 points; the ChiNext Index declined 0.73% to 3,149.6 points. Additionally, the CSI 300 index fell 0.85%, the Northbound Capital 50 index dropped 2.12%, and the STAR 50 index declined 0.47%.

Wind data shows that the total trading volume of A-shares was about 1.67 trillion yuan for the day, a significant decrease of 188.8 billion yuan from the previous day, marking the second consecutive trading day with less than 2 trillion yuan, and also hitting a new low for the year.

In terms of market sectors, most of the 31 first-level industry sectors under Shenwan declined, with only the communication and electronics sectors rising, by 2.66% and 0.13%, respectively. The sectors with the largest declines were agriculture, forestry, animal husbandry and fishery, electric power equipment, textiles and apparel, utilities, and media, falling by 2.84%, 2.68%, 2.56%, 2.55%, and 2.32%, respectively.

On the individual stock level, a total of 4,746 stocks declined across the market, including 41 stocks hitting the daily limit down; only 716 stocks rose, with 38 stocks hitting the daily limit up.

From the perspective of main capital inflows, the top three sectors with net inflows were communication equipment, diversified finance, and automation equipment, with net inflows of 16.7k yuan, 16.7k yuan, and 933 million yuan, respectively. The top three sectors with net outflows were batteries, photovoltaic equipment, and electricity, with net outflows of 20k yuan, 8.18B yuan, and 3.98 billion yuan.

Guo Yiming, director of Jufeng Investment Advisory, told Huaxia Times that the market decline today was unexpected, but considering recent overseas influences, multiple factors may be overlapping pressures. He pointed out that geopolitical risks in overseas regions suddenly increased, with U.S. President Trump issuing extreme threats against Iran on social media, claiming that next steps would be to “destroy bridges, then power plants,” which directly pushed Brent crude oil spot prices soaring to $141 per barrel. The intense turbulence in the energy market quickly transmitted to global risk assets.

Moreover, Guo Yiming said that the uncertainty brought by the Qingming holiday is always a natural catalyst for short-term capital outflows from the A-shares—pre-holiday risk aversion and post-holiday cautious trading habits are amplified in weak environments. Deeper psychological factors include the sharp decline after last year’s Qingming Festival, which left investors with a strong memory, causing many to worry about a repeat of history, leading to preemptive selling and creating self-fulfilling adjustment pressure.

Institutions believe the downside is relatively limited

Since March, with the continued escalation of Middle East conflicts, global financial markets have been on edge, and the A-share market has not been immune.

When the Middle East conflict will end remains highly uncertain. Yang Delong pointed out that U.S. President Trump once signaled that the war could end within two or three weeks but soon stated he would intensify strikes on Iran within the same period, aiming to push Iran back to the Stone Age. Trump’s fluctuating stance on the war has increased market uncertainty and directly caused large fluctuations in global capital markets.

He said that recent market movements have been oscillating, and there is hope for the quick rollout of stabilization measures. The 4,000-point level is an important index threshold; whether the defense of this level can succeed relates to investor confidence.

Deppon Securities chief economist Cheng Qiang said that recently, the A-shares are mainly affected by repeated Middle East geopolitical tensions, oil price fluctuations, and external market sentiment disturbances. Previously, the market traded on expectations of geopolitical easing and some recovery of growth styles, but as the Middle East situation fluctuates again, risk appetite has fallen back, and the market has reverted to a resource and defensive-oriented pattern.

He predicts that under risk-averse sentiment, A-shares may maintain range-bound oscillations, with a focus on structural themes such as computing power coordination and “anti-involution,” and suggests tilting towards dividend and other defensive sectors to some extent.

Xu Zhi, an analyst at Zhongyuan Securities, said that in April, the A-share market is likely to be mainly volatile, with the core variable still being the uncertainty of Middle East developments, which limits the upward space of the index. He recommends adopting a prudent allocation strategy, maintaining positions in dividend assets (banks, transportation, utilities) to resist volatility, while also deploying energy security-related sectors such as power equipment and new energy (lithium batteries, photovoltaics).

He pointed out that risks to watch include whether the geopolitical conflicts in April will develop beyond expectations, whether marginal tightening of overseas liquidity will trigger a collective downturn, and the impact of earnings reports, especially if individual stocks underperform, causing significant fluctuations. If these risks combine to cause unexpected volatility in A-shares, regulators may respond by increasing broad ETF purchases, guiding long-term funds into the market, and releasing signals such as RRR cuts to stabilize the market.

Yang Chao, chief strategist at China Galaxy Securities, believes that since the current US-Iran situation is in a “dynamic balance with significant risks,” further escalation is possible, which could trigger concerns over global energy, supply chains, and inflation. Asset pricing will focus more on strategic resource revaluation and geopolitical safety premiums. He recommends a strategy based on performance and opportunistic deployment.

He added that the three major logical supports—policy backing, capital inflows, and China asset revaluation—remain unchanged, and the downside space for A-shares is relatively limited. The US-Iran conflict has not shaken the foundation of the long-term slow bull market in A-shares.

He also pointed out that the intensive series of technology summits from April 9 to 11, including the 2026 Shenzhen International Electronic Components and Chip Innovation Technology Exhibition, the Greater Bay Area International Liquid Cooling Industry Conference, the 2026 China Humanoid Robot Ecosystem Conference from April 17 to 19, and the 2026 Shanghai Second Global Low-Altitude Economy Exhibition, are expected to have a linked catalytic effect on A-shares, especially in sectors like semiconductors, AI infrastructure, and humanoid robots.

Editor: Ma Xiaochao Chief Editor: Xia Shencha