Tech Stocks Lead Market Rebound, A-Shares Continue Rotation with Resilience Highlighted

On March 18, the A-share market fluctuated and strengthened, with the ChiNext Index rising over 2%. Technology stocks led the rebound, with communication, computers, electronics, and other sectors leading the gains. Over 3,500 stocks in the entire A-share market rose, and 70 stocks hit the daily limit up. Market trading volume shrank, with total turnover in the A-share market reaching 2.06 trillion yuan.

In terms of funds, the main funds in the Shanghai and Shenzhen markets saw a net inflow of nearly 2 billion yuan on March 18, indicating relatively optimistic market sentiment.

Analysts believe that, amid a general adjustment in global equity markets, the A-share market has shown strong resilience. As the market gradually becomes less reactive to negative news and the advantages of domestic policy certainty become more apparent, the A-share market is expected to become more “dominated by its own factors.”

Technology Stocks Drive Market Strength

On March 18, after opening high, the three major indices in the A-share market fluctuated. During the trading session, all three indices fell at times but then strengthened, driven by technology stocks. By the close, the Shanghai Composite Index, Shenzhen Component Index, ChiNext Index, STAR Market Composite Index, and CSI 50 Index rose by 0.32%, 1.05%, 2.02%, 1.77%, and 0.69%, respectively.

The Shanghai 50 Index, which is concentrated in large-cap stocks, fell by 0.07%, while the CSI 300 Index rose by 0.45%. The CSI 1000 Index, CSI 2000 Index, and Wind Micro-cap Index, which focus on small and micro-cap stocks, increased by 0.96%, 1.57%, and 1.70%, respectively, showing more active performance among small and micro-cap stocks.

Technology stocks contributed significantly to the strength of the three major indices. In terms of their contribution to the Shanghai Index, Industrial Fulian, China Merchants Steamship, Bawei Storage, GigaDevice, and Haiguang Information led, contributing a total of 4.16 points, accounting for over 30% of the index’s rise. For the Shenzhen Index, Xin Yisheng, Zhongji Xuchuang, Tianfuzhihong, Sh电股份, and Shenghong Technology contributed a combined 79.94 points, over half of the index’s increase. For the ChiNext Index, Xin Yisheng, Zhongji Xuchuang, Tianfuzhihong, Shenghong Technology, and Xiechuan Data contributed 53.99 points, over 80% of the index’s rise.

In individual stocks, 3,554 stocks in the A-share market rose, with 70 hitting the daily limit up. Meanwhile, 1,831 stocks declined, with 14 hitting the daily limit down. Market trading volume decreased, with total turnover of 2.06 trillion yuan, down 163.5 billion yuan from the previous trading day. Specifically, the Shanghai market’s turnover was 876.3 billion yuan, and the Shenzhen market’s was 1.1697 trillion yuan.

From the sector perspective, technology-related sectors performed strongly, with IDC, memory, AI computing power, and optical modules showing active performance. Conversely, sectors like lithium battery electrolytes, Baijiu, and lithium mining experienced adjustments. Among the primary industries, communication, computers, and electronics led the gains, rising by 5.23%, 2.46%, and 2.41%, respectively, with the overall industry increasing by over 2%. Oil and petrochemicals, real estate, and food and beverages declined the most, falling by 1.47%, 1.05%, and 0.91%.

In the communication sector, companies like Philings, Century Hengtong, and Pingzhi Information hit the 20% daily limit. Companies such as XinKe Mobile-U, Halo New Network, and Xin Yisheng rose over 10%. Zhongbei Communications, Data Port, and Reisconda hit the daily limit, while Tianfuzhihong rose over 8%, and Zhongji Xuchuang increased over 6%.

Recently, the A-share market has been rotating continuously, with unclear main themes. Since March, by the close on the 18th, the CAC index in France has fallen over 7%, the DAX in Germany and the Nikkei 225 in Japan have each fallen over 6%, the KOSPI in Korea has declined over 5%, and the FTSE 100 in the UK and the Dow Jones Industrial Average in the US have each fallen over 4%. In the A-share market, the Shanghai Index and Shenzhen Index have declined by 2.40% and 2.12%, respectively, while the ChiNext Index has increased by 1.09%. Compared to other global markets, the resilience of the A-share market is evident. Among industry sectors, coal, banking, and utilities led the gains, rising by 4.32%, 3.86%, and 3.75%, respectively, while non-ferrous metals, defense, and steel sectors lagged, declining by 13.38%, 9.40%, and 9.38%.

Wang Zheng, General Manager of Shangyi Fund, stated that influenced by external geopolitical tensions, policy uncertainties abroad, and the domestic performance window, combined with stock market competition, overall risk appetite remains weak. Funds are hesitant to focus long-term on a single theme, instead quickly shifting among technology, cyclical, and defensive low-value sectors. Although policies are spreading across multiple points, the lack of a strong main line leads to frequent hot-spot switching and faster sector rotation.

Technology Sectors Attract Capital Inflows

From the fund perspective, market sentiment has improved. On March 18, the main funds in the Shanghai and Shenzhen markets saw a net inflow of nearly 2 billion yuan.

Specifically, Wind data shows that on March 18, the main funds in the Shanghai and Shenzhen markets had a net inflow of 1.986 billion yuan, ending five consecutive days of net outflow. The CSI 300 main fund saw a net inflow of 3.755 billion yuan. The number of stocks with net main fund inflows was 2,016, while 3,164 stocks experienced net outflows.

In terms of industry sectors, 10 primary industries in the Shenwan first-level classification experienced net main fund inflows, with communication, electronics, and computers leading, with inflows of 9.854 billion, 4.315 billion, and 3.757 billion yuan, respectively. Conversely, 21 industries saw net outflows, with basic chemicals, non-ferrous metals, and electric power equipment experiencing the largest outflows of 3.268 billion, 3.182 billion, and 3.176 billion yuan, respectively.

At the individual stock level, on March 18, 101 stocks had net main fund inflows exceeding 100 million yuan, with Zhongji Xuchuang, Xin Yisheng, Goldwind, Tianfuzhihong, and Yingweike leading, with inflows of 2.729 billion, 2.682 billion, 2.218 billion, 1.210 billion, and 764 million yuan, respectively. Meanwhile, 96 stocks experienced net outflows exceeding 100 million yuan, with Dongshan Precision, GCL-Poly, BYD, Shan Zi High-tech, and CATL leading, with outflows of 1.728 billion, 855 million, 798 million, 763 million, and 521 million yuan, respectively.

In the 13 trading days since March, net inflows occurred only on three days—March 5, March 10, and March 18—while other days saw net outflows, indicating cautious market fund behavior on most trading days.

A-Share Market Expected to Become More “Dominated by Its Own Factors”

Regarding the A-share market, Huatai Securities Chief Strategist He Kang stated that, based on market transaction structure and fund behavior, overall risk appetite has cooled. Geopolitical tensions and rising oil prices remain the main contradictions in market pricing. Looking ahead, macroeconomically, short-term risks have not been fully released; global stagflation fears are rising. Domestic liquidity remains ample, but the sustainability of improving import-export and inflation data needs verification. Micro-wise, concerns about AI’s disruptive impact persist among global investors. The upcoming earnings season, which is crucial for the year, will test high-growth sectors like power grid equipment, optical fiber cables, and chemical industries with expected cyclical turning points.

“With evolving external situations, the core contradictions in market pricing are changing in two major ways: first, from ‘intensity escalation’ to ‘negotiation back-and-forth’; second, starting to price in the impact of high oil prices on the economy and policy orientation,” said Zhang Qiyao, Chief Strategy Analyst at Industrial Securities. Once these changes are confirmed, and as the market gradually becomes less reactive to negative news and domestic policy certainty becomes more prominent, the A-share market is expected to become more “dominated by its own factors.”

“Under the overall adjustment of global equity markets, the A-share market has demonstrated strong resilience,” said Yang Chao, Chief Strategy Analyst at China Galaxy Securities. With the support of the market’s own resilience and policy stability, the market will gradually shift from emotion-driven to fundamentals-driven, with earnings becoming the key support for the next phase.

Wang Zheng believes that in the short term, the market will mainly fluctuate sideways with structural differentiation, with limited downside space. External shocks and earnings disclosures will continue to cause volatility. In the medium term, as overseas policies clarify and domestic economic and corporate profits are gradually verified, the market is expected to shift from rapid rotation to trend recovery. The trend will move from emotion-driven themes to a dual drive of earnings and policies, with structural opportunities remaining core.

For market allocation, Wang Zheng suggests a balanced approach: maintaining low-valuation sectors as a defensive base; opportunistically deploying in AI computing power, semiconductors, and other new productive sectors to capture growth; and moderately including consumer and healthcare sectors for low-level recovery, controlling positions, avoiding high points, and focusing on low-buying opportunities.