A-shares hit by "late spring cold snap" Shanghai Composite narrowly holds above 4000 points

(Source: Market Star News)

On Thursday, the A-share market experienced a “late spring cold spell,” with all three major indices closing in the red. The Shanghai Composite Index narrowly held above the 4,000-point mark. At the close, the Shanghai Index fell 1.39%, closing at 4,006.55 points; the Shenzhen Component Index dropped 2.02%, closing at 13,901.57 points; and the ChiNext Index declined 1.11%, closing at 3,309.10 points. The combined trading volume of the Shanghai, Shenzhen, and Beijing markets was 21.275 trillion yuan, an increase of 66.3 billion yuan compared to the previous trading day. In terms of individual stocks, over 4,900 stocks declined across the market, with only about 500 stocks rising, indicating a significant loss-making effect.

Dragged down by the overnight decline of U.S. stocks across the board, the A-share market opened lower and continued to weaken throughout the day, falling into a weak oscillation pattern. Based on trading volume and stock performance, overall market confidence remains fragile, and the adjustment pressure has not been substantially alleviated. This correction in the A-share market is not an isolated event but occurs against the backdrop of profound changes in global market expectations, involving a fierce struggle between external shocks and internal resilience. From the perspective of the market’s own operational logic, external disturbances are resonating with internal structural pressures. On the trading floor, the rapid rotation of hot spots and the lack of profit-taking effects reflect low willingness among new funds to enter the market. Funds within the market are more inclined to cluster in defensive sectors such as oil and utilities. This shift in capital flow is essentially a result of systemic risk aversion driven by geopolitical risks and inflation expectations.

From a technical standpoint, the market experienced a decline on Thursday, with all three major indices falling more than 1%, and the Shanghai Index temporarily losing the 4,000-point level. Technically, as the Shanghai Index continued to decline, the previously established range-bound support was effectively broken, and short- and medium-term moving averages are gradually diverging downward. If a strong recovery does not occur in the short term, the mid-term trend may turn bearish, potentially prolonging the consolidation period and further expanding the correction space. On the sector front, ongoing Middle East conflicts have led funds to seek safe havens in oil, gas, electricity, and banking sectors. The technology and computing power chain sectors have also experienced divergence adjustments due to external liquidity constraints, but capital outflows in segments like CPO and computing power leasing are relatively controlled. Core related stocks still show strong absorption momentum. However, the main technology theme, represented by AI chains, has accumulated significant profit-taking positions. Whether the trend can be maintained remains a key focus; if short-term sentiment causes concentrated profit-taking, there is a risk of further downside.

For investors, rather than fixating on short-term gains or losses, it is more prudent to reassess portfolio structure and adjust investment pace. Conservative investors should safeguard their profits accumulated since last year and remain on the sidelines, which is a rational approach given the current complex environment. Higher-risk investors wishing to participate in short-term trading should strictly control their positions and adopt a quick in-and-out strategy. Opportunities are never truly lacking in the market; the real challenge lies in whether you still have enough ammunition and patience when opportunities arise. Waiting patiently for the situation to clarify and for clear market stabilization signals may be the most pragmatic strategy at this stage.