A-shares decline widens at the end of the session: Shanghai Composite Index falls below 3,900 points, while bank stocks rise against the trend

Three major A-share indexes opened on March 31 with mixed gains and losses. After a brief surge early in the session, the market across both exchanges returned to a downward trend, and the losses widened significantly into the close.

Judging from the intraday trading, the computer-hardware industry chain such as memory chips and CPO fell; solar, lithium batteries, semiconductors, and AI application concept stocks all pulled back noticeably. Chemicals, power, coal, oil and gas, and agriculture sectors were among the biggest decliners. High-speed rail and CRO concept stocks rose against the trend, while big-consumption and big-finance stocks strengthened.

At the close, the Shanghai Composite Index fell 0.8% to 3891.86 points; the STAR 50 Index fell 2.59% to 1256.33 points; the Shenzhen Component Index fell 1.81% to 13478.06 points; and the ChiNext Index fell 2.7% to 3184.95 points.

Wind data showed that, across both A-share markets and the Beijing Stock Exchange, 1008 stocks rose, 4372 stocks fell, and 108 stocks finished flat.

Total trading value on the Shanghai and Shenzhen exchanges was 1992.5 billion yuan, up 76.6 billion yuan from 1915.9 billion yuan on the previous trading day. Of this, trading value on the Shanghai market was 891.9 billion yuan, up 52.1 billion yuan from 839.8 billion yuan on the previous trading day; trading value on the Shenzhen market was 1100.6 billion yuan.

According to Dazhihui VIP, among the stocks on both A-share markets and the Beijing Stock Exchange, 71 stocks had gains of more than 9%, and 22 stocks had losses of more than 9%.

Bank stocks rose against the trend, while coal stocks led the declines

In terms of sectors, bank stocks rose against the trend. Agricultural Bank of China (601288), Bank of China (601988), and others rose more than 3%; Ningbo Bank (002142), Pudong Development Bank (600000), Huaxia Bank (600015), Shanghai Rural Commercial Bank (601825), and China Construction Bank (601939) and others rose more than 1%.

Household appliances led gains across both markets. Hongchang Technology (301008), Chunghuang Technology (603657), and others hit the daily limit. Midea Group (000333), Hisense Visual (600060), and others rose more than 5%; Sichuan Jiuzhou (000801), Robam Appliances (002508), and Remax Shares (603075) and others rose more than 2%.

Food and beverage stocks moved higher against the trend. Anjoy Foods (603345), Huangtai Liquor (000995), and others rose more than 3%; Kweichow Moutai (600519), Qingdao Food (001219), Jinzhongzi Liquor (600199), and Haitian Flavor (603288) and others rose more than 1%.

Coal stocks led the declines across both markets. Shaanxi Heimao (601015), Zhengzhou Coal Power (600121), Yunmei Energy (600792), and others fell more than 8%; Kailuan Shares (600997), Liaoning Energy (600758), Chang’an Energy (601699), Shanxi Coking (600740), and AIT Group (600408) and others fell more than 6%.

Power equipment saw losses among the leading decliners. Haibosi Chuang (688411), EVE Energy (rights protection) (300014), and others fell more than 9%; Tongda Power (002576), Weilan Lithium (002245), Kewo Tech (688551), Haili Wind Power (301155), Shouyang New Energy (301658), and others fell more than 6%.

The electronic sector performed poorly. Linling Micro-Nano (688661), Sihui Fortune (300852), Kaivet (688693), Jinhong Gas (688106), Yangke Technology (002409), and 78 Storage (688525), among others, fell more than 8%.

Markets are more likely to enter a period of consolidation and building momentum around and before the Qingming Festival

Huolong Securities believes that in the short term, the Shanghai Index is likely to trade in a range of 3794–4000 points, and the probability of filling the gap above is relatively high. Sector hot spots are rotating weakly; funds are still mainly defensive, and the A-share market remains in a pattern of sideways correction and repair.

Caitai Securities believes that on the one hand, changes in the Middle East situation have clearly weakened their impact on A shares. Compared with the markets of Japan and South Korea, A shares are gradually returning to their own rhythm and carving out an independent trend. On the other hand, the “near-stagflation” effect globally brought about by overseas energy crises, as well as the earnings risks brought by the A-share financial reporting season, will suppress the timing of entry by incremental capital. During the market’s rebound, there will likely be some back-and-forth, and investors’ willingness to chase higher prices may be insufficient. At the same time, the market style will also shift. Based on this, in the short term the broad market may present a structural market where trading value stays relatively low and thematic sectors diverge. Strategically, the approach will mainly be “hold the strong and drop the weak, enter on pullbacks, and reduce positions on strength.” Given that liquidity has a large influence and stocks at relatively high positions need caution, investors should focus on stocks with strong earnings growth and lower valuations. In the medium term, the market is likely to be dominated by wide-range consolidation; volatility could increase. It is recommended to control position sizes reasonably and wait for market-driven turning point signals to emerge. However, the foundation of this A-share round of market performance remains solid. It is expected that the current Middle East conflict will only affect short-term market sentiment and the market’s operating tempo, and will not change the market direction. Investors should remain confident in the long-term uptrend for the market and should not worry excessively.

Oriental Securities believes that March is about to end, and the “down first, then up” path has become clearly visible. Looking ahead to the coming April, “slow bull” buildup will be the main theme for next month. The Middle East situation has not yet been fully resolved, and this week may still carry risks of escalation. The repair of market risk appetite will not happen overnight. But the pattern of “external disturbances but internal stability” remains unchanged, so there is no need to worry that downside risks will get out of control. Around and before the Qingming Festival, the market is more likely to enter a period of consolidation and building momentum.

CITIC Securities released a research report stating that the conflict between Iran and the U.S. has exposed the vulnerability of the energy supply chain. Power, as a strategic “cushion” for China’s energy security, is expected to be repriced. Against a backdrop of improving marginal policy stance and electricity price expectations bottoming out earlier, the power sector is expected to gain opportunities for a dual repair of fundamentals and valuation. The report recommends nuclear power leading players that benefit from standardized unit approvals; hydropower leaders with high-quality underlying assets and stable dividends; coal-and-power integrated enterprises that have advantages in upstream resources and can effectively hedge fuel price fluctuations; as well as H-share green power and H-share thermal power with valuations that are relatively low and dividends that are attractive.

CITIC Securities Investment Banking stated in its research report that the securities sector has threefold positive marginal developments, and strong earnings performance in 2026 beyond expectations is worth looking forward to. The allocation value of the insurance sector has become apparent. It suggests focusing on investment opportunities in stocks with high dividend yields, low valuations, and low sensitivity of earnings. In the Hong Kong non-bank financial sector, the medium- and long-term allocation value stands out under the resonance between low-valuation characteristics and improved earnings expectations. For the diversified financial sector, under a stabilizing regulatory logic, a clearly defined direction to boost consumption, and a backdrop of AI technologies improving efficiency, the consumer finance industry is in a dual drive period of policy dividends plus technology dividends.

China Merchants Securities stated that the recent market has been hit by a relatively strong liquidity shock, but from a funding perspective there is no major risk. First, the main incremental funding this round for financing and private placements is currently in a profitable state and has a relatively high margin of safety, so a negative feedback loop to the downside will not occur. Second, recently ETF outflows have continued, and major institutional investors have not entered the market yet. Finally, the return of Middle East capital will boost the market’s upward movement at the narrative level; this is a high-probability event in the medium to long term and cannot be easily disproved in the short term. “Whether people believe it” is more important than “whether it is true,” and to some extent the narrative will become self-fulfilling. Looking ahead, the space for A shares to plunge sharply further is limited. The key observation signals at the phase bottom hinge on when the capital market’s stability mechanism begins to take substantive action.

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