A-share midday review | Suppressed by three factors, the Shanghai Composite Index fell nearly 1% in half a day and lost the 3900 point mark! Technology sector leading the counterattack against the market.

On April 3, the market opened high in the morning and then traded lower, with the Shanghai Composite Index falling nearly 1% once again losing the 3900-point level. By midday, the Shanghai Composite Index was down 0.93%, the Shenzhen Component Index was down 0.73%, and the ChiNext Index was down 0.21%. The total trading volume in the Shanghai and Shenzhen markets reached 1.07 trillion yuan in the first half of the day, down 115.7 billion yuan from the previous trading day. So, what reasons led to the A-share market not maintaining its high opening? It was found that the current market is facing three adverse factors: First, the conflict in the Middle East has raised risk aversion sentiment. Market analysis believes that last night and this morning, an unexpected escalation of tensions in the Middle East (such as Trump's statement on escalating attacks on Iran) directly caused a surge in oil prices. This panic sentiment quickly spread to A-shares, with foreign and institutional funds choosing to "run first as a sign of respect," directly collapsing the fragile high opening trend in the morning. Second, today is the last trading day before the Qingming Festival holiday. Facing the uncertainty of a 4-day market closure, funds in the market choose to take profits at high levels and secure gains rather than continue to attack above 3900 points. Third, some market analysts have pointed out that, from the market structure, the area above 3900 points is a densely trapped area from the previous period. After touching this area with a high opening in the morning, selling pressure from trapped and profit-taking positions formed a combined force. With multiple factors resonating, it ultimately led to a situation where "the index turned green, and individual stocks fell overall." Looking ahead, Guotai Haitong's chief strategist Fang Yi believes that after the market adjustment, it is important not to panic, as the Chinese stock market is currently at an important bottom and turning point. Market corrections are opportunities, and active positions are recommended. In terms of industries, finance and stability are still preferred, while the Chinese technology manufacturing and stable domestic demand sectors are seen positively. In terms of market trends, technology stocks staged a strong comeback, with concepts such as optical chips, optical modules, optical fiber cables, 6G, and others surging. On the other hand, sectors such as coal, chemicals, electrolytic aluminum, the oil and gas industry, and electricity experienced significant declines. Additionally, due to holidays surrounding Good Friday, the Qingming Festival, and Easter, the Hong Kong stock market will be closed for 5 days starting from April 3. Popular Sectors: 1. CPO Concept Active Again: The hardware computing power concept, including CPO, performed strongly against the trend, with several stocks hitting their daily limit. 2. Computing Power Leasing Concept Partially Active: The computing power leasing concept saw some movement, with the computing power scheduling direction leading the gains. 3. Weakness in the Power Sector: The power sector experienced weakness, with several stocks plummeting. Institutional Views: - Guotai Haitong: Market corrections are opportunities, and active positioning is recommended. - Huatai: Dividends still have bottom-value. - CITIC SEC: The innovative pharmaceutical industry is entering a period of intensive data catalysis, and it is recommended to pay attention. (Source: Tencent Stock Selection, Translation by GMTEight)