On March 3, the three major indexes of China’s A-shares, including the Shanghai Composite Index, the Shenzhen Component Index, and the ChiNext Index, all closed down, with a total of 4,802 stocks declining across both the Shanghai and Shenzhen markets. Some brokerage firms believe that from after the Chinese lunar new year until the end of April, the market is likely to mainly experience wide fluctuations, with the volatility potentially increasing.
On that day, the A-share indexes initially surged after the opening bell, but quickly reversed course and fell sharply. In the afternoon session, A-shares saw unilateral declines, with the losses widening. By the end of the trading day, the Shanghai Composite Index fell by 1.43% to 4,122.68 points, the Shenzhen Component Index dropped by 3.07% to 14,022.39 points, the ChiNext Index declined by 2.57% to 3,209.48 points, and the STAR 50 Index fell by 5.21% to 1,388.41 points.
According to data from the financial information provider Wind, a total of 642 stocks across the Shanghai and Shenzhen stock exchanges as well as the Beijing Stock Exchange recorded gains, while 4,802 stocks saw declines, with 35 remaining unchanged. Additionally, data from the high-end investment tool Dazhihui VIP showed that there were 108 stocks with gains of over 9% and 229 stocks with losses exceeding 9% across these exchanges.
Moreover, the total turnover of the Shanghai and Shenzhen markets amounted to 3.1295 trillion yuan, an increase of 108 billion yuan compared to the previous trading day’s 3.0207 trillion yuan. Specifically, the turnover in Shanghai was 1.4258 trillion yuan, up by 79.9 billion yuan from the previous day, while Shenzhen’s turnover reached 1.7037 trillion yuan.
In terms of sectors, the defense and military industry fluctuated downwards, non-ferrous metals saw significant declines, and semiconductor stocks dropped sharply. On the other hand, the petroleum and petrochemical sector rose due to geopolitical factors, while coal stocks fluctuated upwards.
Regarding this, on March 3, financial news source The Paper cited an analysis from securities firm Cai Xin Securities, stating that on that day, A-shares exhibited significant style differentiation driven by the decrease in overseas risk preferences and the fluctuating impact of geopolitics. Funds were inclined towards dividend stocks, resources, and large and medium-cap stocks, while pressure was felt in the direction of science and technology innovation, consumer, and small and micro-cap stocks. Looking ahead, with increasing influence from recent overseas macro events, it is anticipated that the trend of A-shares will still need to wait for a directional market, likely characterized by wide fluctuations, until the end of April.
Meanwhile, Huolong Securities believes that the digestion of geopolitical factors in the A-share market is relatively thorough, with no apparent signs of panic. Overall, the indexes are likely to continue fluctuating structurally, with the possibility of a recovery if the external environment stabilizes.