How will the A-shares perform after the holiday? The market outlook is not pessimistic; stay tuned for the attack signal.

During holidays, it’s a great time to revisit and reorganize your investment logic.

According to the latest strategy views from multiple securities research institutes, although investors’ wait-and-see sentiment is currently strong, there are no pessimistic signals on the funding front. The trend of retail funds continuing to enter the market remains unchanged. Before the “shoe drops” on geopolitical conflict, the market is expected to sustain a sideways trend. Waiting patiently for the signal that the counteroffensive is about to begin may be the more prudent strategy for now.

There has been no weakening in the willingness to add to positions

In March, the conflict between the U.S. and Iran shook global capital markets, and A-shares saw the largest pullback since the so-called “reciprocal tariffs” in 2025. However, despite increased volatility in index movements and ongoing shrinking trading volume, Zhang Qiyao, Chief Strategy Officer at Industrial Bank Securities (601377), emphasized that he had not observed negative feedback in A-share liquidity. Some absolute-return funds may have reduced positions slightly in the earlier period, but after the adjustment, the willingness to add positions became stronger.

He pointed out that since the current round of market gains began, funds entering the market have shown a “convergence” effect from various types of capital, including risk-capital funds, ETFs, private funds, margin financing and securities lending (two-financing), and fixed-income plus (solid income+). With the diversification of incremental funds and expectations of a backstop from the so-called “state team,” liquidity has been more resilient—this is also one of the key supports for A-shares having performed relatively better than other global markets since March.

Among them, fixed-income plus, pension funds, and insurance funds all belong to broadly absolute-return targeted funds. The equity “center of gravity” is around 15%. With larger market volatility in the earlier period and pressure on full-year returns facing a possible turn negative, some funds reduced positions a bit to protect returns. Meanwhile, incremental operating funds for insurance and pensions continue to grow rapidly, and there is strong demand for allocation to equity assets. Adding shares at lower levels for building positions may be a more preferred choice.

Chen Gang, Chief Strategy Analyst at Soochow Securities, also mentioned that currently, there has not been any obvious outflow of micro-level funds. On one hand, financing funds have not fled materially due to rising risks. As of April 3, the financing balance was RMB 2.58 trillion, which was only down RMB 25.8k compared with the high point at the start of March. At the same time, the financing guarantee ratio remains clearly higher than the level in the first half of 2025. On the other hand, although the total net asset value of equity-type ETFs has fallen significantly, it mainly comes from a decline in market capitalization. As of April 3, the total ETF shares were 2.1 trillion units, down only 76.08B units compared with the high point at the start of March.

He believes that it is currently investors’ more pronounced wait-and-see attitude that is causing the trading volume to shrink. If risks ease, residents may accelerate their entry into the market. As of April 3, A-share trading volume was RMB 1.67 trillion, not below the low point in December 2025, and also significantly higher than the level in the first half of 2025. Meanwhile, the number of newly opened accounts in March was 4.6 million households, second only to October 2024 and January 2026. Residents’ enthusiasm for entering the market is high and has not been dampened by market adjustments stemming from geopolitical risks.

Expected that the sideways trend will continue—suggest waiting

“Maintain resolve and quietly wait for the counteroffensive.” Liao Jingchi, Chief Strategy Officer at China Merchants Securities (601878), said the complexity of geopolitical turmoil in the Middle East and the “spiral-like escalation” in the substance of the conflict mean global capital markets will still face pressure, so A-shares may continue to display a pattern of consolidation with sideways movement. It is expected that in the short term, the Shanghai Composite Index will operate in a way of “range-bound trading, a second attempt to find the bottom, support at the lower bound, and pressure at the upper bound.” The “right foot” of the second bottoming process may take shape gradually in late April, and there is also a prospect of generating a rebound at the weekly level.

Based on the judgment of “geopolitical escalation driving global volatility, and A-shares conducting a second attempt to find the bottom,” he suggests staying cautious in the short term and treating the market as range-bound. When the index approaches the “upper bound” of the new volatility range, abandon greed and appropriately “sell at a high level.” When the index moves to the “lower bound” of the new volatility range, overcome fear and “buy at a low level” moderately. If the Middle East situation becomes clearer after mid-April, and the structural bottom of A-shares’ medium-term base takes shape, then it will be time to actively increase allocations and expand upside flexibility.

The latest allocation suggestion provided by China Merchants Securities’ Financial Engineering Research Team is also “waiting.” Overall, before geopolitical risks have been fully cleared, the probability is higher that the market will remain in a range-bound environment. Also, considering the impact of high oil prices on global economic growth, A-share earnings are likely to come under pressure. However, China’s domestic economic data is not bad at present; leading indicators such as credit are showing a warming trend. In addition, after valuation adjustments, there will be renewed room for valuation expansion, so A-shares have relatively strong resilience.

On the style front, regardless of whether the market performance in the future leans toward a more optimistic scenario, or leans toward a more cautious scenario characterized by “a decline in medium-term demand and the CPI-PPI scissors gap passively narrowing,” historical statistics suggest that in the short term it is not advisable to over-allocate aggressive products such as growth styles. It is suggested to still use value styles with stronger defensive attributes as the main allocation to reduce volatility, and it will not be too late to switch to offensive positioning after risks are further cleared.

(Editor: Zhang Yan )

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