A-shares make a major comeback! Global financial markets turn around instantly

As market risk slides toward the brink of losing control, Trump has “TACO”ed again.

Less than an hour and a half after Trump’s so-called “final deadline” for Iran, the U.S. and Iran agreed to a two-week ceasefire. The news instantly relieved the global financial markets of high pressure and quickly reversed the trend.

On the 8th, the stock market sounded the call for a counteroffensive.

All three A-share indexes surged sharply higher. The Shanghai Composite Index reclaimed the 3,900-point level and was at 3,960.79 points, up 1.81%; the Shenzhen Component Index rose more than 400 points to 13,870.37, up 3.51%; and the ChiNext Index returned to 3,300 points after several days, up 4.41%.

Market sentiment and leadership style changed dramatically. Oil and gas and coal sectors fell hard: Blue Flame Holding closed down at the daily limit; Guanghui Energy fell by more than 9%; PetroChina fell by more than 4%; and China Shenhua fell by more than 3%. In defensive sectors, central state-owned enterprise banks edged down slightly, with Agricultural Bank of China, Bank of China, and Industrial and Commercial Bank of China all down more than 1%.

Gold and other precious metals—which had been suppressed recently—rose more than 7%. Cultural media, internet, and construction machinery sectors rose more than 6%, while sectors such as electronic components, software, semiconductors, and more gained more than 4%. For individual stocks, Bluefocus 20% hit the daily limit; Luoyang Molybdenum rose by more than 8%; and Zijin Mining rose by more than 6%.

Hong Kong stocks clearly warmed up. As of the time of writing, the Hang Seng Index was up 2.56% to 25,759.54 points; and the Hang Seng Tech Index was up 3.7% to 4,852.44 points. The tech narrative has returned to the market’s focus: the semiconductor sector rose more than 8%, Tianshu Zhixin rose more than 26%, HUAHONG Semiconductor rose more than 13%, and Ruili Technology rose more than 12%.

Stock markets in Japan and South Korea, which are heavily influenced by international oil prices, moved even more aggressively. As of the time of writing, Japan’s Nikkei 225 was up nearly 5%, and South Korea’s KOSPI Composite Index was up nearly 6%.

The U.S. stock market is currently closed, but U.S. stock index futures have already surged across the board. As of the time of writing, Dow Jones futures (mini) were up more than 2%; Nasdaq 100 futures (mini) were up more than 3%; and S&P 500 futures (mini) were up more than 2%.

On the 8th, international oil prices plunged sharply. WTI crude oil futures at one point fell by nearly 20%, and ICE Brent fell by more than 16% during the day. On the early morning of the 8th, Iran’s Foreign Minister Aragchi issued a statement on behalf of Iran’s Supreme National Security Council, announcing that the Strait of Hormuz would achieve safe navigation within two weeks.

Precious metals, which had been suppressed for days by the strong U.S. dollar, also saw a significant lift. On the 8th, spot gold returned above $4,800. As of the time of writing, it was up more than 2% to $4,815 per ounce. Spot silver rebounded strongly, setting the highest level since March 19; it was at $76.6 per ounce, up more than 5%.

In the foreign exchange market, after the inflation risks brought by high oil prices were released to some extent, the U.S. dollar index fell in response. It was down 0.67% to 98.9836. Non-U.S. currencies rebounded across the board: the euro against the U.S. dollar was up more than 0.6%, the Japanese yen against the U.S. dollar was up nearly 0.7%, the British pound against the U.S. dollar was up nearly 0.8%, and the offshore Chinese yuan against the U.S. dollar was up more than 0.3%.

(“The views in this article are for reference only and do not constitute investment advice. Investing involves risk; when entering the market, be cautious.”)

Author | Chen Junming

Editor | Zhang Shunan

Proofreader | Jia Yifu