The Shanghai Composite Index falls below 3,900 points, with over 4,500 stocks declining, and trading volume shrinks to over 230 billion yuan! The power sector once again leads the limit-up wave, with China Power Energy hitting the limit-up 4 times in 6 days | A-shares close

Reporter | Du Bo

Editor | Duan Lian, Du Hengfeng Proofreader | He Xiaotao

On March 26, the market experienced fluctuations and adjustments, with all three major indexes dropping over 1%, and the Sci-Tech 50 Index declining over 2%. By the close, the Shanghai Composite Index fell by 1.09%, the Shenzhen Component Index dropped by 1.41%, and the ChiNext Index decreased by 1.34%. The trading volume in the Shanghai and Shenzhen markets fell below 2 trillion, decreasing by 236.2 billion compared to the previous trading day. Over 4,500 stocks in the market declined.

From a sector perspective, the power sector performed actively, with Huadian Energy achieving four limit-ups in six days, Hunan Development hitting three consecutive limit-ups, and Jinko Power, Guangxi Energy, and ShenNan Electric A reaching their daily limits. Lithium battery material stocks repeatedly strengthened, with Rongjie Co., Ltd. achieving three consecutive limit-ups, and Shida Shenghua and Dazhongnan hitting their limits. The commercial aerospace concept saw localized increases, with Shenjian Co., Zhongchao Holdings, Western Materials, and Zaiseng Technology reaching their daily limits.

On the downside, the concept of power grid equipment weakened, with Shun Sodium Co. hitting the limit down, and Yineng Power, Dongfang Cable, and Caneng Power experiencing significant declines. The fiber optic concept oscillated downwards, with Farsen hitting the limit down.

In the medium to long term, the Shenwan Hongyuan strategy team believes that the fundamentals of the A-share market’s upward trend have not changed. They stated that an increase in oil price levels may bring mild stagflation, but due to the relatively low domestic inflation base and the maturity of the policy framework for addressing structural economic issues domestically, the cost pressures faced by A-shares will be significantly less than in historical extreme scenarios (2010-2011, 2021).

Additionally, the midstream manufacturing industry is still in a historically significant supply clearing cycle, with capacity growth expected to be lower than revenue growth in the second half of 2026. It is anticipated that the profitability of A-shares will effectively rebound in 2026, with cumulative profits rising quarter-on-quarter year-on-year. The medium-term upward trend of A-shares has a solid fundamental basis.

“The advantages of the Chinese economy are becoming more evident, and the medium to long-term positive trend of the Chinese capital market has not changed. Rapid changes in liquidity are not the norm for the A-share market; some short-term issues have been over-interpreted as medium-term concerns. The short term may be when pressure is greatest, but in the medium term, confidence remains strong, and patience should be maintained.”

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