Collective dive! Asia-Pacific stock markets, "Black Monday"

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Asia-Pacific markets face a “Black Monday.”

On March 23, Asia-Pacific markets collectively plunged, with the Nikkei 225 down 3.48% and the Korea Composite Index down 6.49%.

Both A-shares and Hong Kong stocks declined. The Shanghai Composite Index fell over 4% intraday, briefly dropping below 3,800 points, and the Sci-Tech Innovation Board Index dropped over 5%. The Hang Seng Index and Hang Seng Tech Index both fell over 4% in the afternoon.

Specifically, major stock indices in both markets declined sharply during the day, accelerating in the afternoon. By the close, the Shanghai Composite fell 3.63% to 3,813.28 points, the Shenzhen Component Index dropped 3.76%, the ChiNext Index fell 3.49%, and the Sci-Tech Innovation Board Index declined 4.93%. The combined trading volume of Shanghai, Shenzhen, and Beijing markets was about 2.45 trillion yuan, up approximately 145 billion yuan from the previous day.

Nearly 5,200 A-shares turned green, with over 140 stocks hitting the daily limit down. Semiconductors, pharmaceuticals, real estate, non-ferrous metals, insurance, brokerages, and banks all declined; however, the coal sector rose against the trend, with Yun Coal Energy and Liaoning Energy hitting the daily limit. The power sector was relatively active, with China Power LiaoNeng (600396) achieving six consecutive limit-ups. Some photovoltaic chain stocks showed strength, such as Zhejiang New Energy, Tori New Energy, and Chint Power (rights protection), all hitting the daily limit. Notably, BYD surged significantly during the session, rising over 8% at one point and closing up more than 4%.

Regarding the future market, Guotai Haitong Strategy team believes that stability is scarce, and the Chinese market has lower risk premiums. The growth logic is breaking the “stagflation” narrative, with China’s market becoming more diversified. The Russia-Ukraine conflict and US-China tariff disputes show that after emotional peaks, market trends depend on internal logic. China’s declining risk-free rates, financial market reforms, and economic structural transformation are the fundamental drivers and pillars of the “transformation bull” in China’s capital markets.

Zheshang Strategy notes that China’s energy self-sufficiency rate has reached 85%, far higher than Japan and South Korea’s approximately 15%. This makes A and H shares more resilient under geopolitical spillover effects. China’s energy structure grants it stronger supply resilience. Compared to Japan, South Korea, and Germany—countries heavily dependent on oil and gas imports—China’s industrial cost “safety cushion” offers advantages. China’s relatively stable energy security and industrial system could become a “safe haven” for global capital. The upward shift in crude oil prices may amplify the vulnerability of high-valuation Japanese and Korean stocks.

Additionally, international precious metal prices have plummeted. As of the report, COMEX silver fell over 11%, COMEX gold dropped over 10%, spot silver nearly 8%, and spot gold declined more than 6%.

Financial sector declines

Insurance, banking, and brokerage sectors all declined during the day. By the close, China Life Insurance fell over 5%, and CITIC Securities, CICC, Everbright Securities, and Agricultural Bank of China all declined about 4%.

Recently affected by geopolitical conflicts, the insurance and brokerage sectors continued to adjust. On March 18, the central bank stated it would firmly maintain the stability of stock, bond, and foreign exchange markets. Open Source Securities notes that the medium-term logic for insurance and brokerages remains unchanged. Deposit migration and a slow bull market support long-term growth in non-bank businesses and assets. Industry prosperity is improving, with five A-share insurance companies’ P/EV ratios falling to 0.73, and leading brokerages’ PB and PE ratios at historic lows. In the short term, they may show defensive characteristics, with potential opportunities on the left side of the market, especially with quarterly reports approaching.

For banks, Wanlian Securities states that policies promoting steady growth through coordinated monetary and fiscal measures will continue. Liquidity remains ample. External geopolitical risks cause short-term market volatility and lower overall risk appetite, favoring defensive assets. Policy reforms expected by 2026 could facilitate a smooth transition between old and new growth drivers. High-dividend stocks still offer some opportunities. Considering current dividend yields and valuations, the banking sector remains attractive for allocation.

Coal sector defies the trend and rises

The coal sector rose against the trend during the day. By the close, Yun Coal Energy and Liaoning Energy hit the daily limit, Shanxi Coking Coal rose over 9%, Zhengzhou Coal & Electricity nearly 7%, and Pingmei Coal Group about 6%.

Industry-wise, influenced by overseas geopolitical conflicts, reduced Indonesian coal imports, and rising import costs, the market’s shipping demand improved. International coastal coal freight rates continued to rise, and domestic coal prices started increasing due to overseas developments. Data shows that as of March 20, Qin港Q5500 thermal coal settled at 735 yuan/ton, up 6 yuan from the previous week. Coking coal prices at JingTang Port reached 1,620 yuan/ton, rebounding from a low of 1,230 yuan in early July 2025. Coking coal futures also rebounded from 719 yuan in early June to 1,171 yuan, a nearly 63% increase.

CITIC Securities points out that since the Middle East conflict began three weeks ago, domestic coal prices have been lower than expected, but oil and gas prices overseas continue to rise, outperforming the price trends during the Russia-Ukraine conflict. The impact of the Middle East conflict on global coal supply tightening is gradual. Sustained high oil and gas prices are expected to boost global high-calorie coal consumption, raising the coal price center in Asia-Pacific and benefiting domestic coal price expectations.

The firm believes three short-term factors will support steady increases in thermal coal prices: 1) improved chemical industry profits boosting coal demand; 2) better industry data in the first two months of the year, suggesting a stronger-than-expected annual outlook; 3) ongoing conflicts maintaining overseas coal premiums. Additionally, coking coal prices are expected to remain stable or rise due to inventory replenishment and improved coking profitability.

China Huadian LiaoNeng hits six consecutive limit-ups

China Huadian LiaoNeng (600396) hit the daily limit again today. The stock closed at 6.89 yuan per share, with over 260,000 buy orders at the limit. This marks six consecutive trading days of limit-up.

The company issued a notice on the evening of March 20, stating that from March 16 to March 20, its stock price hit the limit for five consecutive days, with a cumulative deviation of 64.72%, significantly diverging from the market and industry. Investors are advised to be cautious of trading risks, make prudent decisions, and invest rationally. The company confirmed that its operations are normal, mainly engaged in thermal power generation, with thermal power capacity accounting for 82.56%. There have been no major changes in daily operations, costs, or sales, and no significant policy or market environment adjustments affecting production or management.

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