A-shares open high, rise high with increased volume, Shanghai Composite Index surges by a hundred points, aiming for 4,000 points

Why does the easing of Middle East tensions boost A-shares with increased trading volume?

All three major A-share indices opened higher on April 8. In the early trading session, the two markets opened high and continued to rise sharply, with a unilateral surge. The upward momentum persisted in the afternoon, with the ChiNext Index rising over 5%, and the Shanghai Composite Index climbing more than 100 points toward 4,000.

From the market perspective, technology stocks rebounded across the board, with gains led by computing hardware, semiconductor equipment, AI computing power, consumer electronics, humanoid robots, commercial aerospace, and fintech themes; gold, industrial metals, and large financial sectors performed strongly. Oil and gas, coal stocks experienced corrections.

By the close, the Shanghai Composite rose 2.69% to 3,995 points; the Shenzhen Component Index increased 4.79% to 14,042.5 points; the ChiNext Index gained 5.91% to 3,347.61 points.

Wind statistics show that a total of 5,164 stocks in both markets and the Beijing Stock Exchange rose, 301 declined, and 24 remained unchanged.

The total trading volume was 2,434.5 billion yuan, up 820.1 billion yuan from the previous trading day’s 1,614.4 billion yuan. Among them, the Shanghai market traded 1,074.2 billion yuan, an increase of 350.3 billion yuan from 723.9 billion yuan; the Shenzhen market traded 1,360.3 billion yuan.

According to Dazhihui VIP, 300 stocks across both markets and the Beijing Stock Exchange gained over 9%, while 12 stocks declined over 9%.

Electronics sector surges to limit-up, Petrochemical stocks plunge sharply

In terms of sectors, the electronics sector experienced a surge to limit-up, with more than 50 stocks such as Shannong Core Innovation (300475), Xunjie Xing (688655), Dianlian Technology (300679), Aisen Co., Ltd. (688720), Zhidongli (300686), Zhenlei Technology (688270) hitting the daily limit or rising over 10%.

AI application strength drove media stocks higher, with more than 10 stocks such as BlueFocus (300058), Yidian Tianxia (301171), Tianlong Group (300063), Shunwang Technology (300113), Chinese Online (300364), and Worth Buying (300785) hitting the limit or rising over 10%.

Mechanical equipment also performed notably, with over 30 stocks like Kele Co. (301070), Jiuzhou Yigui (688485), Deyang Technology (688112), Anda Intelligent (688125), Puyuan Jingdian (688337), Jintaiyang (300606), Guangyun Da (300227) hitting the limit or rising over 10%.

Precious metals surged significantly, leading to gains in non-ferrous metals, with stocks such as Xiaocheng Technology (300139), Yuyan Powder Materials (688456), Hunan Silver (002716), Western Gold (601069), Xingye Silver Tin (000426), Dongfang Tantalum (000962) hitting the limit or rising over 10%.

Petrochemical stocks plummeted sharply, with Tongyuan Petroleum (300164), Lanyan Holdings (000968), Beiken Energy (002828), Zhongman Petroleum (603619) hitting the limit down or falling over 9%, Guanghui Energy (600256), Intercontinental Oil & Gas (600759) falling over 7%.

Coal stocks also underperformed, with China Coal Energy (601898) dropping over 6%, Jin Control Coal (601001), Yankuang Energy (600188), Shaanxi Black Cat (601015), Haohua Energy (601101) falling over 2%.

If short-term adjustments are seen as opportunities for deployment

Huatai Securities states that the Middle East situation has eased, with Trump agreeing to suspend bombing Iran for two weeks on April 8, and Iran accepting a ceasefire proposal from Pakistan. From last night’s asset performance, U.S. stocks rebounded intraday, crude oil plummeted, and the VIX index spiked then retreated. We believe a TACO trading window is opening in the short term. The positive sentiment has shifted to practical actions. However, uncertainties remain, as the VIX remains high, indicating the market has not fully priced in the end of the conflict, so risk management is necessary. Regarding allocation, the A-share market on April 1 can serve as a prelude to TACO trading, focusing on two directions: first, previously oversold sectors, such as those with the largest declines in March—TMT, non-ferrous metals, steel, building materials, machinery—main themes of spring market cycles and tech, benefiting from easing rate cut expectations. Mechanical equipment is driven by external demand. The second group involves sectors related to low oil prices and independent prosperity cycles, such as AI chains and innovative drugs. From a medium-term perspective, the war has exposed energy security issues, so continue to watch the power supply chain; if short-term corrections present opportunities, consider deployment.

Huajin Securities believes that, currently, the fundamentals may continue to recover, with sufficient release of overseas risks and sentiment adjustments, and policies leaning positive, suggesting that A-shares may have bottomed in the short term. It is recommended to continue buying on dips: first, sectors with upward policy and industry trends such as AI hardware (communications), semiconductors, AI hardware (electronics), new energy (power, energy storage), innovative drugs, non-ferrous metals, chemicals, and military industry (commercial aerospace); second, undervalued dividend sectors like coal, power, and banking.

CITIC Securities points out that with the explosion of Agent applications and multimodal ecosystems, capital expenditure and computing power demand mismatch, and global token usage is entering a new acceleration phase. Over the past two years, the cloud industry chain is expected to enter a period of rising volume and prices. Demand has driven up prices in the cloud industry chain, entering a cycle of volume and price increases. Regarding computing power leasing, high-quality computing chips are in tight supply, with leading leasing firms gaining advantages, and higher leverage increasing high-growth certainty. It is recommended to focus on cloud industry chain and computing power leasing-related targets.

For the future, Industrial Securities states that, influenced by emotional inertia, some high-quality assets may be “mispriced” during the Middle East conflict, and portfolio structure should gradually shift toward sectors with clearer prosperity. Based on the recent rise and fall since March, sectors most affected by external shocks include: AI (domestic semiconductor computing power, PCB, downstream gaming, consumer electronics), advanced manufacturing (new energy, military), cyclical sectors (non-ferrous metals, chemicals, steel, glass fiber), service and new consumption (retail, jewelry, pet economy), and non-bank financials.

Guojin Securities notes that the current market structure is not stable; if the conflict escalates, so-called resilient assets may also face corrections; if tensions ease, it may not be the best solution. The biggest current shock source is energy, and resolving energy conflicts is the true resilient asset. The share of energy in global GDP is likely to rise. Based on current information, considering the combined expectations of both scenarios and increasing market optimism, the following recommendations are made: first, the world is entering an energy replenishment cycle, with new and old energy sources resonating (oil, shipping, coal, lithium batteries, wind, solar, energy storage); second, after the gradual retreat of the dollar illusion, the rebound of commodities’ financial attributes and demand recovery in copper, aluminum, gold; third, a revaluation of China’s manufacturing: machinery, chemicals, as China’s manufacturing becomes a global ballast, sustained export surprises and capital inflows will bring new drivers to subdued domestic demand, seeking structural opportunities amid changing constraints, such as tourism and scenic spots, fermented flavorings, beer and other alcohols, pharmaceuticals, and medical aesthetics.