Zheshang Securities: Geopolitical disruptions continue to disturb the market; maintain resolve and optimize the structure

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Source: Zheshang Securities

This week, Middle Eastern geopolitical tensions took a dramatic turn, with crude oil prices fluctuating at high levels, and global financial markets continuing to oscillate. Looking ahead, we believe this round of geopolitical conflict has already peaked, but disturbances have not fully subsided. As external influences weaken, combined with our analysis of the intrinsic trends of A-shares and H-shares, we expect the market to remain volatile within a range and experience narrow fluctuations. From a quarterly perspective, we remain optimistic about a “systematic slow bull” opportunity. Regarding allocation, based on the judgment that “the peak of conflict still lingers, and the market will continue to fluctuate within a range,” we recommend: in timing, maintain strategic discipline until the market stabilizes completely—neither overly pessimistic nor blindly optimistic—while optimizing industry structure in the early stage of controlling overall flexibility to achieve a balanced offense and defense. Industry-wise, we continue to recommend a “new and old energy” combination, with new energy (electricity) and traditional energy (power) as the “offensive spear”; hold onto relatively low-positioned securities for a balanced offense and defense; simultaneously, on the defensive side, add agriculture and transportation sectors on top of previous banking and petrochemical holdings to enhance “anti-fragility.”

Additionally, some key Chinese-character stocks are worth attention. Those with relatively low positions and dividend attributes serve as “ballast stones” during escalations of geopolitical conflicts, while some involved in infrastructure, oil transportation, shipping, and ports directly benefit.

Market overview for this week (2026-03-09 to 2026-03-13):

1. Major indices: The US-Iran geopolitical conflict remains unresolved, and global financial markets continue to fluctuate.
2. Sector observation: Energy and dividends show anti-fragility; overall impact of risk appetite is subdued.
3. Market sentiment: Trading volume in Shanghai and Shenzhen has increased.
4. Capital flows: Margin financing and securities lending balances slightly increased; net outflows from stock ETFs.
5. Quantitative “black technology”: Major indices are moderately to highly valued, with the ChiNext index at a relatively lower valuation level.

Reasons for this week’s market movements:

1. The Fourth Session of the 14th National Committee of the Chinese People’s Political Consultative Conference concluded.
2. China’s goods trade exports and imports grew by 18.3% in January-February.
3. China’s CPI rose by 1.3% year-on-year in February.

Next week’s market outlook: Looking ahead, as the US repeatedly states that “military actions are nearing an end,” global risk appetite has rebounded, and volatility has somewhat contracted compared to the previous week. However, Iran remains firm in its stance, and conflicts continue. Considering these factors, we believe this round of geopolitical tensions has peaked, but disturbances are not fully over. As external influences weaken, combined with our analysis of the intrinsic trends of A-shares and H-shares, we expect the market to remain within a range with narrow fluctuations. The A-share weighted index has undergone sufficient adjustment and is gradually improving structurally, likely stabilizing after mid-March. Some growth stocks, due to recent daily MACD divergence and large gains since last year, may face earnings pressure during the earnings season, and technically, they may stabilize after late April. Among H-shares, Hang Seng Tech Index experienced rapid declines earlier and may still need to consolidate and confirm a second bottom. From a quarterly perspective, we remain optimistic about a “systematic slow bull” opportunity.

Regarding allocation, based on the judgment that “the peak of conflict still lingers, and the market will continue to fluctuate within a range,” we recommend: In timing, maintain strategic discipline until the market stabilizes—neither overly pessimistic nor blindly optimistic—while optimizing industry structure early on to achieve a balanced offense and defense. Industry-wise, continue to recommend a “new and old energy” mix, with new energy (electricity) and traditional energy (power) as the “offensive spear”; hold relatively low-positioned securities for a balanced offense and defense; at the same time, optimize defensive sectors by adding agriculture and transportation on top of previous banking and petrochemical holdings to enhance “anti-fragility.” Some Chinese-character stocks with low positions and dividend attributes are worth attention, serving as “ballast stones” during conflicts; others involved in infrastructure, oil transportation, shipping, and ports will directly benefit.

Risk warnings:

• Domestic economic recovery may fall short of expectations.
• Global geopolitical uncertainties persist.