<img src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OS89IJOQGH5Q4ogUg3_v6UVHT9VxC5T1Aa5ALe7deMaAsAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OS89IJOQGH5Q4ogUg3_v6UVHT9VxC5T1Aa5ALe7deMaAsAA/641"/> According to China National Radio, on March 19, the A-share market experienced fluctuations throughout the day. By the close, the SSE Index fell by 1.39%, closing at 4006.55 points; the Shenzhen Component Index dropped by 2.02%, the ChiNext Index fell by 1.11%, and the STAR Market Composite Index decreased by 2.3%. The market turnover exceeded 2.1 trillion yuan.
In terms of sectors, precious metals, energy metals, chemicals, rare earth permanent magnets, steel, and chemical fibers saw significant declines, while oil, natural gas, and electricity sectors performed well against the trend. Over 4,900 stocks in the market declined.
Among them, the SSE Index has been continuously retreating recently, with a drop of over 1.6% during the session on the 19th, reaching a low of 3994.17 points. This marks the first time the SSE Index has fallen below 4000 points since January 5, just a step away from the year's low.
What happened in the market?
On the news front, the situation in the Middle East continues to escalate, leading to soaring oil prices. According to CCTV News citing Reuters, with the ongoing energy crisis, Iran's previous claim that &#34;oil prices will reach $200 per barrel&#34; may become a reality. Data shows that as of 16:30 Beijing time on March 19, ICE Brent crude was near $108 per barrel, still maintaining a high level.
Several experts told China National Radio Finance that the escalation of the Middle East situation has triggered turmoil in global capital markets, and the soaring oil prices have raised concerns about &#34;stagflation,&#34; suppressing risk appetite. This has shifted market expectations for a Federal Reserve rate cut from &#34;when will it cut&#34; to &#34;will it cut or not,&#34; intensifying fluctuations in U.S. Treasury yields and putting valuation pressure on global equity assets, especially high-valuation tech growth stocks.
The market reaction is evident. As of March 19 Beijing time, global markets were generally in the red, except for Russia. The Nikkei 225 index plummeted by 3.38%, the South Korean KOSPI dropped by 2.73%, the Indian SENSEX30 index fell by 2.45%, the Hong Kong Hang Seng Index decreased by 2.02%, and major U.S. stock indices all fell by over 1%.
<img src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/O8fSmZ4udRyl1-8sLsz2hDk9G3B4NzUfa_1uuCPBkz3wYAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/O8fSmZ4udRyl1-8sLsz2hDk9G3B4NzUfa_1uuCPBkz3wYAA/641"/>
(Screenshot from Wind)
Translating to the A-share market, Tian Lihui, director of the Financial Development Research Institute at Nankai University, told China National Radio Finance that the SSE Index briefly falling below 4000 points on the 19th was the result of a resonance between external shocks and internal adjustments. The escalation of geopolitical conflicts in the Middle East and the surge in international oil prices are the direct triggers for the adjustment in the A-share market.
On March 19, among the A-share industry indices, only six sectors, including oil and gas, gas, coal, diversified finance, telecommunications, and electricity, saw gains, while the remaining 54 industry indices declined, with precious metals leading the losses. In terms of individual stock performance, on March 19, a total of 505 stocks in the A-share market rose, 4,955 fell, and 19 remained unchanged
Among them, Tianhao Energy, Tongniu Information, and Kaitian Gas had the largest increases, rising by 20.00%, 19.99%, and 19.74%, respectively.
&#34;In the short term, the market is still in a period of risk release. Geopolitical conflicts continue, oil prices fluctuate at high levels, and expectations for interest rate cuts are cooling—these three suppressive factors have not fundamentally eased, and there is still a possibility of repeated contention around the 4000-point mark,&#34; said Tian Lihui.
How will the A-shares market perform in the future?
Zhu Jinjing, a strategy analyst at Hualong Securities, believes that under the backdrop of geopolitical disturbances, there are still several favorable factors supporting the stable operation of the market. First, the economy is resilient; in the first year of the 14th Five-Year Plan, various sectors are seizing opportunities to promote the commencement of major projects, driving investment recovery. Second, policies stabilize expectations; the 2026 Government Work Report proposed to continue deepening comprehensive reforms in capital market investment and financing, further improving the mechanism for medium- and long-term funds entering the market and enhancing investor protection systems. Third, uncertainties are gradually being priced in by the market.
&#34;From a medium-term perspective, the core logic supporting this round of A-shares market has not reversed.&#34; In Tian Lihui's view, the trend of steady recovery in the domestic economy, the continuous support of macro policies for the capital market, and the inherent driving force for industrial upgrading and transformation remain solid. Therefore, this adjustment is more of a phase-based and structural re-evaluation. More profoundly, if the US-Iran conflict becomes prolonged, it may accelerate some changes in the petrodollar system, while China currently has a dual pillar energy base of &#34;coal + new energy,&#34; which may become a safe haven for global capital. &#34;Geopolitical conflicts will not change the market's direction; they will only affect the rhythm of its operation,&#34; said Tian Lihui.
Cheng Qiang, chief economist at Debang Securities, stated that the A-shares market may primarily focus on structural trends in the short term, suggesting attention to annual report performance. Looking ahead, Cheng Qiang believes that the A-shares market may continue its structural trend. &#34;From the macroeconomic environment, China's economy is in a critical period of transformation and upgrading, with increasing policy support providing fundamental support for the market.&#34; Cheng Qiang also reminded that the uncertainty of the external environment is increasing, and the risk of global economic growth slowing is rising, which exerts pressure on market sentiment.
What directions can be focused on?
Zhang Gang, an analyst at Zhongyuan Securities, believes that the central bank has clearly stated that it will flexibly use tools such as reserve requirement ratio cuts and interest rate cuts to maintain ample liquidity; at the same time, it supports the Central Huijin Investment Company to play a role similar to that of a &#34;stabilization fund,&#34; boosting market confidence in the subsequent trends. &#34;It is expected that the Shanghai Composite Index will likely maintain slight fluctuations and consolidation, and investors are advised to closely monitor macroeconomic data, changes in overseas liquidity, and policy trends. In the short term, it is recommended to focus on investment opportunities in industries such as finance, photovoltaic equipment, automotive parts, and chemical fibers,&#34; said Zhang Gang.
In terms of industry and thematic allocation, Zhu Jinjing stated that first, attention should be paid to growth directions such as technology and advanced manufacturing, focusing on TMT sectors like electronics, software, and communication services; advanced manufacturing directions such as power equipment, national defense and military industry, and automation equipment; second, to boost and expand domestic demand, focusing on automobiles, home appliances, and medical devices; third, to address involution and supply-demand changes, focusing on non-ferrous metals, special steel, and chemical fibers. Zhu Jinjing also reminded to be cautious of risks such as economic underperformance, industry risks, exchange rate risks, data risks, trade protectionism risks, global liquidity risks, and black swan events
Tian Lihui believes that three major variables need to be focused on currently. The first is external variables, suggesting attention to the evolution of the Middle East situation and the trend of oil prices, as these are the core contradictions in short-term market pricing. The second is internal variables, recommending attention to the upcoming annual reports and quarterly reports, as the main theme of &#34;performance is king&#34; is expected to return. &#34;Certain stocks and concepts that were previously overvalued and speculated may face performance verification pressure with the disclosure of financial reports.&#34; The third is policy variables, as the Federal Reserve's subsequent statements and the implementation rhythm of domestic stable growth policies will bring changes to the stock market.
&#34;For ordinary investors, rather than getting caught up in how much was earned or lost today and focusing on short-term gains and losses, it is better to reassess what stocks they hold, what the holding structure looks like, and patiently wait for the situation to clarify.&#34; In terms of allocation direction, Tian Lihui suggests that in the short term, attention can be paid to defensive sectors related to energy security such as oil and gas, coal, and utilities; in the medium term, consideration should still be given to laying out technology growth targets with huge future development prospects such as AI computing power, semiconductors, and humanoid robots, while also paying attention to whether their fundamental support is solid

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On March 19th, the A-share market experienced a volatile adjustment, with the SSE Index falling by 1.39%, breaking below 4000 points for the first time, reaching a low of 3994.17 points. The escalation of the situation in the Middle East and soaring oil prices triggered turmoil in global markets, leading to a decline in investors' risk appetite. Experts pointed out that the resonance of external shocks and internal adjustments is the reason for the drop in the Shanghai Composite Index. Global markets generally fell, with the Nikkei 225 Index plummeting by 3.38%

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The Shanghai Composite Index fell below 4000 points during trading. How does the market view this?