Afternoon Rebound! A-Share Trading Volume Hits Monthly Low, This Sector Leads Gains Again

On March 18, the three major indices all closed higher, ending a four-day losing streak for the Shanghai Composite Index. At the close, the Shanghai Index rose 0.32%, the Shenzhen Component Index increased 1.05%, and the ChiNext Index gained 2.02%.

In terms of sectors, the computing power industry chain saw a surge, with CPO concepts rebounding across the board, liquid cooling server concepts fluctuating and rising, computing power leasing concepts strengthening, and storage chip concepts climbing. On the downside, oil and gas stocks weakened, and the chemical sector declined.

Over 3,500 stocks in the market rose. The combined trading volume of the Shanghai and Shenzhen markets was 2.05 trillion yuan, shrinking by 161.8 billion yuan compared to the previous trading day.

Data shows that since February this year, the Wind All A Index has repeatedly rebounded after falling near 6,600 points, forming a relatively “stable” lower boundary of the box.

Previous bottoming rebounds have been quite consistent: strong recoveries occurred on February 3, February 10, March 5, and March 10.

However, this week, the pace of recovery has noticeably slowed down.

After closing with a lower shadow on Monday, the index plunged again on Tuesday; today (Wednesday), after a morning dip, it continued to rebound in the afternoon, ending the day with a slightly shorter lower shadow.

The simplest and most direct reason is that the market volume has decreased, insufficient to support a “violent” rebound in the index.

On the four previous strong rebound days, the total A-share trading volumes were 2.57 trillion yuan, 2.27 trillion yuan, 2.41 trillion yuan, and 2.42 trillion yuan respectively. Today, the market’s trading volume was only 2.06 trillion yuan, hitting a new low for the month.

However, individual stock sentiment has already begun to recover, with the average stock price in the All A index rising by 1.62%.

Combined with the trading volume forecast chart, it can be seen that although overall volume has shrunk, market activity has been gradually picking up throughout the day.

This volume-price pattern at present at least conveys two signals:

First, the bottom support remains intact. If the recovery is still expected, it is more likely a case of “trading time for space.”

Referring to the oscillating box from September to December last year, the market also experienced small-step rebounds after single-day sharp declines, such as from November 24 to early December.

Some technical breakpoints during trading, which seem to be emotional lows, are also worth moderate speculation.

Second, after a “super low” volume appears, even if short-term trading volume hits new lows, the turning point often isn’t far off.

However, for investors with a more aggressive trading style, like many who have already exited and are observing, “rest” or “watch more and act less” before a volume surge can be a comfortable choice.

Returning to sectors,

It’s not hard to see that the technology stocks that led the recovery on Monday are once again leading the gains today.

Concepts like CPO and PCB continued to strengthen against the trend in the morning.

On the news front, on March 16, Nvidia announced the Feynman chip, which introduces optical communication between chips for the first time, reducing AI data center communication energy consumption by over 70%.

Dongwu Securities pointed out that, according to the GTC conference, a single LPU server consists of 32 trays, with each tray integrating 8 LPU chips. Compared to previous cabinet architectures, the number of trays (equivalent to PCB count) has significantly increased, representing an added demand for PCB components.

Liquid cooling concept stocks also rebounded.

Reports indicate that Google recently dispatched a team to mainland China to investigate a liquid cooling device used for data center servers, which is highly important for the development of U.S. AI technology.

Storage chip concepts experienced significant volatility over the past three trading days, possibly boosted by a sharp rise in the Korean stock market.

According to reports, SK Hynix revealed that current DRAM and NAND inventories only last about four weeks, with supply shortages affecting cloud vendors and consumer electronics terminals. Vivo recently adjusted some product prices, citing the ongoing surge in global semiconductor and storage costs, making it the latest smartphone manufacturer after OPPO and Honor to announce price increases. Semiconductor price hikes are accelerating the pass-through to end products.

Additionally, noteworthy is that previously prolonged adjustments in commercial aerospace have seen a “positive rebound” today. Tianfeng Securities noted that recent developments in the domestic commercial aerospace industry are promising, with expectations that subsequent industry growth will be catalyzed, emphasizing investment opportunities in “AI + overseas expansion + satellites.”

Guotai Haitong Securities believes that the current market correction is not solely due to geopolitical conflicts. The seasonal effects brought by the upcoming earnings season, combined with geopolitical tensions, have led the market into a consolidation phase. This period is more suitable for defensive strategies, patiently waiting for opportunities.

They stated that from mid-March to April, during the earnings disclosure period, the market tends to be driven mainly by fundamentals. Compared to trend speculation during high sentiment periods, investors focus more on actual company value. Coupled with reduced risk appetite due to geopolitical conflicts, trading volume tends to be lighter, and most sectors perform relatively flat, which is a normal market phase. Excessive pessimism is unwarranted.

In the short term, two key variables should be closely monitored: first, the situation in the Strait of Hormuz and progress in conflict negotiations. If both sides reach consensus, geopolitical disturbances will gradually dissipate, and market logic will return to normal; if conflicts persist, supply chain restructuring impacts will intensify. Second, changes in domestic data, especially PPI rising and its transmission to CPI, will be crucial. If price systems recover smoothly and deflationary pressures ease, it will inject upward momentum into the market.

(Source: Daily Economic News)