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This report (chinatimes.net.cn) reporter Shuai Kecong reports from Beijing
On March 20, 2026, the three major A-share indices closed mixed. The SSE Index fell more than 1% to 3957 points, falling below the 4000-point mark, setting a new low for the year; the ChiNext Index rose more than 1% after a pullback. Over 4700 stocks in the entire market were in the red, with most popular industry sectors declining.
A person related to the well-known private equity firm Xing Shi Investment told the &#34;Hua Xia Times&#34; reporter that after the recent pullback, there is no need to be overly pessimistic about the market at this position. Although high oil prices may lead to stagflation overseas, China's inflation pressure is overall not significant, domestic policy goals are clear, and tools are sufficient. The global supply chain disruptions caused by the Middle East conflict may be an opportunity to validate China's economic stability advantages. This year, the space for continuous valuation increases is limited, and the recovery of corporate profits in the next stage is key to the sustained bull market of A-shares.
SSE Index Falls Below 4000 Points
On March 20, the three major A-share indices opened mixed, with significant divergence in intraday trends. The SSE Index continued to fluctuate and decline, while the Shenzhen Component Index and ChiNext Index showed a pullback after a rise.
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By the close of the day, the SSE Index fell 1.24%, closing at 3957.05 points, marking the first time this year it closed below 4000 points; the Shenzhen Component Index fell 0.25%, closing at 13866.2 points, having once risen over 1.7% during the day; the ChiNext Index rose 1.3%, closing at 3352.1 points, having once surged over 3.5%. In addition, the CSI 300 Index fell 0.35%, the North Stock 50 Index fell 1.01%, and the Sci-Tech Innovation 50 Index fell 1.55%.
The total trading volume of A-shares for the day was approximately 2.3 trillion yuan, an increase of over 175 billion yuan compared to the previous day, marking the 19th consecutive trading day with a trading volume exceeding 2 trillion yuan. At the market close, 4786 stocks were down, including 23 stocks hitting the limit down; only 662 stocks were up, with 39 stocks hitting the limit up.
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On the market, most popular industry sectors declined, with only photovoltaic equipment, energy metals, batteries, and power sectors rising, among which the photovoltaic equipment sector surged over 3%; IT services, communication services, and software development sectors had the largest declines, falling 4.68%, 4.64%, and 4.09% respectively
From the perspective of the flow of main funds, the top three sectors with net inflows are photovoltaic equipment, communication equipment, and batteries, with net inflows of 7.281 billion yuan, 5.439 billion yuan, and 4.091 billion yuan respectively; the top three sectors with net outflows are IT services, semiconductors, and software development, with net outflows of 7.12 billion yuan, 6.942 billion yuan, and 4.717 billion yuan respectively.
Behind the surge in the photovoltaic equipment sector, media reported on March 20 that the Tesla team plans to purchase a large scale of Chinese photovoltaic equipment, involving several listed companies. As early as the beginning of February this year, news of Tesla CEO Elon Musk inspecting multiple Chinese photovoltaic companies had already attracted significant market attention.
&#34;From the perspective of market sentiment and capital flow, the current market shows particularly prominent characteristics of insufficient support,&#34; said Guo Yiming, Director of Investment Advisory at Jufeng Investment Consulting, to a reporter from the China Times. The index filled the gap from the beginning of the year without any resistance during the session, and there was no significant counteraction in the process, which fully indicates that the incremental capital is in a strong wait-and-see mood, and there is considerable pressure for funds to escape the market, leading to a lack of sufficient buying support.
The dual concerns arising from the Middle East geopolitical crisis and the hawkish monetary policy of the Federal Reserve are suppressing global financial market sentiment. Some analysts believe that in the current macro environment, on one hand, high global oil prices may push up inflation, while on the other hand, the shortage of crude oil supply may lead to disruptions in some global industrial chains, raising market concerns about a potential global economic downturn.
When Will the Stock Market Adjustment End
Market participants generally believe that the future direction of the Middle East situation and the expected changes in the Federal Reserve's monetary policy path will be important factors determining how major global stock markets will unfold next.
Xiong Yuan, Chief Economist at Guosheng Securities, pointed out in a research report released on March 19 that the Federal Reserve is expected to remain on hold this week, with only one person opposing; the meeting particularly emphasized concerns about the Middle East situation, and Powell also revealed discussions about the possibility of future interest rate hikes. Looking ahead, the Federal Reserve can only strengthen its wait-and-see stance against the backdrop of rising uncertainty in the short term, but the market is betting that the U.S. will not cut interest rates this year, closely monitoring changes in the oil price center and the duration of high oil prices.
Xiong Yuan tends to believe that the situation in Iran has lasted for over three weeks, and there are no signs of rapid easing, indicating that energy prices such as crude oil and natural gas will remain high; the scenario of &#34;rising oil prices—upward inflation—Federal Reserve pausing interest rate cuts or even raising rates—increased possibility of stagflation&#34; suggests that global liquidity is likely to gradually tighten, which will continue to suppress market risk appetite, and it is advisable to be wary of the possibility of a deep adjustment in the stock market.
The market research department of Xinyuan Fund believes that the adjustment of A-shares in this round of geopolitical shocks is relatively low compared to the external markets and has recovered quickly, reflecting a certain resilience. However, the current geopolitical risks are broader, oil prices are higher, and the Federal Reserve's statements are relatively strong, making it difficult for the market to quickly return to a high-risk appetite state in the short term. The subsequent factors that will truly determine whether A-shares can stabilize need to observe whether there is any easing or change in the escalation of geopolitical conflicts, the rise of oil price centers, the rebound of inflation expectations, and the postponement of Fed interest rate cuts.
Guotai Junan Securities' research report states that the recent geopolitical conflicts in the Middle East have attracted widespread market attention, and the sentiment in the A-share market is inevitably affected. The impact of this Middle East conflict on various assets is similar to the logic at the beginning of the Russia-Ukraine conflict—initially, market expectations were insufficient, leading to severe fluctuations in asset prices, and as time goes on, the impact will shift from a simple price shock,
Gradually shifting towards the restructuring of the supply and demand structure of the industrial chain.
However, Cathay Securities believes that the current market adjustment is not solely caused by geopolitical conflicts; the seasonal effects brought by the annual report season are overlapping with this, jointly pushing the market into a volatile phase. In the long term, the bull market pattern of A-shares remains unchanged, and the revaluation of China is still underway. During the volatile phase, the only way to better grasp subsequent investment opportunities is to maintain patience and focus on core assets, waiting for the disruptive factors to clarify and for turning points to appear.
As the market has continued to decline recently, when can investors bottom fish? Guo Yiming believes that bottom fishing must adhere to the principle of &#34;waiting for the market bottom and waiting for trading volume to increase,&#34; and one should not blindly bottom fish and get trapped; in the short term, one can pay attention to structural opportunities and prepare for bottom fishing, while in the medium to long term, patience must be maintained, core holdings must be defended, and existing profits must be preserved, waiting for clearer entry signals. For ordinary investors, the most rational operation at present is to control positions and observe rationally, avoiding being swayed by short-term market fluctuations, and gradually increasing layout efforts after the market bottom is confirmed

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The SSE Index fell below 4,000 points, hitting a new low for the year, closing at 3,957.05 points, a decline of 1.24%. In the A-share market, over 4,700 stocks declined, with most popular sectors falling. Despite the market correction, private equity firm Xing Shi Investment stated that there is no need to be overly pessimistic, believing that the stability of the Chinese economy will be validated, and the recovery of corporate profits is key to the future bull market

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Lost 4000 points! The SSE Index hits a new low for the year, with over 4700 stocks in the red