Friday, A-shares experienced a rare major rebound! What happened?

Ask AI · How Can Easing in the Strait of Hormuz Trigger a Rebound in China’s A-Share Market?

Reporter: Xiao Ruidong | Editor: Zhao Yun

On March 27, the market opened lower and then turned higher, with the Shenzhen Component Index up more than 1%. As of the close, the Shanghai Composite Index was up 0.63%, the Shenzhen Component Index up 1.13%, and the ChiNext Index up 0.71%.

In terms of sectors, the lithium battery industrial chain surged, the pharmaceutical sector strengthened, and the chemical sector was active. On the downside, many stocks in the green power direction fell.

Across the entire market, more than 4,300 individual stocks rose. The trading value of both Shanghai and Shenzhen markets has remained below 2 trillion yuan for two consecutive days. Today it was only 1.85 trillion yuan, a shrink of 90.3 billion yuan versus the previous trading day.

Compared with the declines of the last two Fridays, today’s A-shares were “an exception to the norm,” giving retail investors quite a pleasant surprise.

First, after a very low open in the morning, it turned positive.

Shanghai Composite Index intraday time chart (including call auction)

At 9:25, the number of stocks rising and falling across the market was like this ↓

But after the open, the number of advancing stocks kept fluctuating upward. By the close at 11:30, more than 3,700 individual stocks were already up.

The three major indices also turned positive at that time.

Second, the whole afternoon session moved higher, with the gains climbing to another level.

An even more astonishing scene happened at 13:00—during the very first minute after the afternoon open. The market-wide surge in volume happened across the board with no distinction, and sentiment was instantly ignited. In the subsequent trading sessions, this portion of the gains was broadly maintained through the close.

In the end, the broad market finally returned with a long-awaited “rally from the brink.” Given that today’s full-day trading value hit a new low of 1.86 trillion yuan, “a bottom appears when volume is low” may become possible again.

You’re probably very curious: What’s the reason?

Judging from the similarly rapid recovery of losses in the intraday performance of the Korea and Japan stock markets, the most important stimulus is most likely coming from the Strait of Hormuz. During today’s trading, some somewhat warmer news was indeed reported.

According to media reports, the United Arab Emirates has told its allies that it will participate in a multinational naval special operations force, with the goal of reopening the Strait of Hormuz. At the same time, the UAE side is lobbying to form an alliance to ensure that ships can pass through this critical sea passage.

Earlier, Malaysia said that Iran allows some of its oil tankers to pass through the Strait of Hormuz. Over the past 24 hours, the number of Iran-related vessels that attempted to go through the Strait of Hormuz increased slightly, mainly bulk carriers and liquefied petroleum gas (LPG) transport ships.

In addition, local time on Thursday, US President Trump said that Iran allowed 10 oil tankers to transit the Strait of Hormuz, as a “gift.”

According to Xinhua News Agency, Trump also posted on the same afternoon that “at the request of the Iranian government,” he would postpone his “destruction” actions against Iran’s energy facilities by 10 days, extending the deadline to 20:00 (U.S. Eastern time) on April 6 (08:00 Beijing time on April 7).

Morgan Stanley said they observed three oil tankers sailing out of the strait on March 26, and estimated that the number of passing vessels on the previous day should be raised from zero to two. Based on conditions over the past few days, the institution estimates that since March 23 to March 26, as many as 12 vessels have passed through the strait.

Also, according to China Central Television News, on March 26, U.S. Secretary of State Rubio said that negotiations between the United States and Iran have made progress, but he would not reveal the details.

On the other hand, looking at the trend for the whole week, A-shares have also broadly found a phase “floor.”

In its research note, Dongxing Securities said that China, as one of the world’s major oil importers, faces direct cost pressure from high oil prices as a primary trigger. Meanwhile, rising energy prices also heighten further concerns about a global economic downturn, which then affects the overall environment for China’s manufacturing exports. Second, rising energy prices bring changes to the pace of the Federal Reserve’s monetary policy—market expectations for rate cuts are pushed back, and the stronger U.S. dollar puts pressure on funding across global capital markets.

It said that the conflict has eased to some extent, which helps improve market risk appetite; the short-term disruptive impact of oil prices has been reduced significantly; the market has returned to a fundamentals-driven logic; and after the earlier adjustment, growth stocks that had fallen more sharply are likely to stop declining and rebound. The market has fallen back from the earlier 4,000–4,200 point range to the 3,800–4,000 range, and a new market-bottom consolidation “center” may form near 3,900. Based on the impact of several wars—such as the Iraq War, the Russia-Ukraine conflict, and others—on capital markets, these have all been short-term disruptions and do not constitute a long-term core factor,

“Therefore, the market may form a medium-term bottoming area. From the full-year perspective, around 3,800 points may become the region for medium- to long-term positioning. The core logic for how the A-share market operates still lies in the progress of domestic economic recovery, monetary policy, and industrial upgrading; the industry development direction in the ‘15th Five-Year Plan’ remains a key focus for growth-stock positioning.”

In terms of sectors, there are two major leadership directions worth watching today.

(1) Energy metals (lithium battery industrial chain)

On the news front, the main contract for lithium carbonate on the Guangzhou Futures Exchange broke through 160,000 yuan/ton intraday and was up nearly 2% during the session.

A research note from Huatai Securities believes that considering that supply disruption risks still exist in the second half of the year—such as in China’s Yichun region and overseas areas like Zimbabwe—the demand side, with high oil prices supporting expectations for electric vehicle and energy storage demand, could lead to global lithium carbonate maintaining a tight supply-demand balance in 2026 if it follows the neutral scenario assumption (global new energy vehicle sales year-on-year growth of 10%–15%, and energy storage cell shipment year-on-year growth of 50%–60%).

(2) Pharmaceuticals (innovative drugs)

The data show that as of March 21, 2026, China’s innovative drug “going global” BD total packages have already reached $57.1 billion, with an upfront payment of $3.3 billion and a number of 53 deals. The total packages are equivalent to 41% of 2025’s full-year level and have already surpassed the level of all of 2024, reflecting improving global recognition of China’s innovative assets.

Also, according to reports, from April 17 to 22, the American Association for Cancer Research (AACR) annual meeting will be held in San Diego. 104 Chinese pharmaceutical companies will bring more than 250 innovative drug products to the event. Among them, 92 are ADC drugs, covering popular targets such as Claudin18.2, HER2, Nectin-4, and others. In addition, 66 small-molecule drugs focus on cutting-edge targets such as KRAS and PRMT5. Novel technology platforms such as radiopharmaceuticals, DAC, cell therapy, and mRNA will also concentrate on disclosing preclinical data.

Some institutions say that domestically developed innovative drugs are gradually catching up to, and even surpassing, Europe and the United States at the early research stage; the medium-term period will inevitably usher in a harvest window. They continue to look favorably on investment opportunities in this sector.

Daily Economic News