---
title: "Next week, the A-shares may stir things up!"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/280033839.md"
description: "This week, the A-share market performed poorly, with the three major indices showing mixed results and an average stock price decline of 4.3%. China and the United States held economic and trade consultations in Paris, reaching a new consensus. The Federal Reserve kept interest rates unchanged, and international oil prices fluctuated upward. The market is facing a policy vacuum, and a ceasefire in the short term is difficult, putting pressure on global capital markets. Despite the short-term challenges, the policy tone remains positive, and more favorable policies are expected to be introduced"
datetime: "2026-03-21T23:46:21.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/280033839.md)
  - [en](https://longbridge.com/en/news/280033839.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/280033839.md)
---

# Next week, the A-shares may stir things up!

This week, the A-share market performed poorly, with the three major indices showing mixed results on a weekly basis. Except for the ChiNext, which accumulated a rise of 1.26%, both the SSE Index and the Shenzhen Index experienced consecutive declines, with cumulative drops of 3.38% and 2.9%, respectively. The average stock price fell by 4.3%, indicating a poor overall profit effect.

On a macro level, China and the United States held economic and trade consultations in Paris, France, where both sides engaged in candid, in-depth, and constructive discussions on trade issues of mutual concern, including tariff arrangements, promoting bilateral trade and investment, and maintaining existing consensus from previous consultations. Some new agreements were reached, and consultations will continue. The first economic report card for China's 14th Five-Year Plan period has been released. The Premier of the State Council presided over the 11th plenary meeting of the State Council to deploy key work for 2026. The Federal Reserve maintained the federal funds rate target range at 3.50%-3.75%, marking the second consecutive time it has held steady, in line with market expectations. The situation in the Middle East continues to escalate, leading to fluctuations in international oil prices.

**Article Logic**

1.  Investment Outlook
2.  Recent Market Review
3.  Market Capital Flow
4.  Market Temperature

**1\. Investment Logic**

**Strategy Outlook:** This week, the overall market performance was poor, with the average stock price falling by 4.3%. The three major indices showed mixed results on a weekly basis; apart from the ChiNext, which accumulated a rise of 1.26%, both the SSE Index and the Shenzhen Index experienced consecutive declines, with cumulative drops of 3.38% and 2.9%, respectively. In terms of sectors, this week, apart from slight increases in telecommunications and banking, all other sectors closed lower, with non-ferrous metals and chemicals leading the decline, falling by 11.75% and 9.87%, respectively.

**From a fundamental perspective, with the conclusion of the National Two Sessions, the macroeconomic work deployment for 2026 has basically been finalized, and the market has entered a brief policy vacuum period. Coupled with the ongoing turmoil and complexity in the Middle East, it is difficult for the war to cease in the short term, leading to increased fluctuations in international oil prices, which undoubtedly exert a phase-specific suppression on global capital markets. Additionally, the Federal Reserve's decision to hold steady for the second consecutive time, along with Powell's hawkish remarks, has significantly impacted market sentiment, making it difficult for A-shares to remain unaffected. However, from a policy perspective, the tone has been set this year to "continue to implement a more proactive fiscal policy and moderately loose monetary policy, strengthening the coordination of reform measures and macro policies," and more policy details are expected to be released in the future, which remains favorable for A-shares in the medium to long term.**

**Regarding the current market trend, after a week of consecutive declines, the market has broken below the monthly M5 level and has consecutively fallen below the 60-day and 120-day moving averages, failing to hold the 4000-point level. The market may still have the momentum for further declines. Although the medium to long-term logic of sectors like new productive forces remains unchanged, in the short term, with the market lacking support, any logic is difficult to be effective. It is recommended that investors control their positions and avoid blindly bottom-fishing, waiting for the market to stabilize and for a turnaround in the Middle East situation before making decisions.** **Technical Perspective:** **Currently, the daily level of the market has broken down, and there is still a possibility of a short-term inertia decline. It is recommended that investors with low risk tolerance can appropriately control their positions.**

**Market Direction:** **Insiders revealed that Tesla is seeking to procure photovoltaic manufacturing equipment worth $2.9 billion (20 billion RMB) from Chinese suppliers such as Maiwei Co., Ltd. to meet CEO Musk's goal of building 100GW of solar manufacturing capacity in the United States.**

**Multiple informed sources disclosed that relevant departments held a meeting this morning, requiring pig farming companies to report their annual production targets and asking each company to prepare to adjust their commitments, reducing the annual output based on the completion of the reduction of breeding sows.**

**In 2026, the global memory industry will enter a high growth cycle driven by demand from AI and other sectors. As the supply-demand relationship in the DRAM and NAND Flash markets remains tight, the performance of major industry players has significantly improved. The financial reports released by major companies such as Micron, Samsung, and SK Hynix have all reached historical highs, indicating a strong recovery in industry profitability.**

**Next week, it is recommended to focus on the following three directions:**

**(1) Photovoltaics:** Tesla's intention to procure equipment worth billions marks a new stage where Chinese photovoltaic equipment has transitioned from "import substitution" to "technology export." Chinese photovoltaic equipment manufacturers, leveraging technological leadership and cost advantages, are becoming indispensable "shovel sellers" in global capacity expansion. With the accelerated establishment of photovoltaic manufacturing capacity in Europe, the United States, and the Middle East, A-share equipment leaders with full-line delivery capabilities are expected to continue securing large overseas orders, opening up a second growth curve.

**(2) Live Pigs:** The regulatory authorities held a meeting to guide leading pig farming companies to reduce their output targets, indicating that the industry's capacity control efforts are intensifying. This move releases a clear signal of supply contraction: further constraining annual output based on the already reduced breeding sow inventory will strongly promote the industry's supply-demand structure from surplus to balance. Currently, the valuation of the pig farming sector is at a historically relatively low level, and as the substantial contraction on the supply side translates into pig prices, farming profits are expected to experience a restorative rebound.

**(3) Storage:** In 2026, the global storage industry will enter a high prosperity cycle driven by the AI wave, with the tight supply-demand pattern pushing DRAM and NAND prices to continue rising. The performance of international giants like Micron and Samsung has reached historical highs, confirming a comprehensive reversal of the industry's strong cycle. Against this backdrop, A-share storage industry chain companies not only benefit from the profit elasticity brought by the overall industry surge but also add the long-term logic of domestic substitution. As domestic wafer production capacity is released and the autonomy of supply chains for end customers accelerates, local module, interface chip, and supporting manufacturers are ushering in a golden development period of simultaneous volume and price increases.

**II. Recent Market Review**

**(1) A-share Market**

This week, affected by the escalation of the US-Iran conflict, the A-share market saw a significant decline, with all major broad-based indices recording negative returns except for the ChiNext Index. In terms of market capitalization style, large-cap stocks demonstrated relative resilience during the market pullback, with the CSI 300 and SSE 50, representing the large-cap style, experiencing relatively smaller declines of 2.19% and 2.47%, respectively, during the week; The Guozheng 2000, representing the small and micro-cap style, fell by 5.45%; the Zhongzheng 500, representing the mid-cap style, experienced a larger decline of 5.82%. The market style showed internal differentiation characteristics; amidst the overall market pullback, the AI industry chain computing hardware sector, which has performance certainty, continued to attract funds, driving the ChiNext Index to rise 1.26% during the week, becoming the only broad-based index to record an increase. The CSI 300 and SSE 50, representing the value style, performed moderately; while the Sci-Tech Innovation 50, also part of the growth style, showed weakness, falling 4.03% during the week.

![Image](https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/O50xb2bDJOY2ttOHLPmIts0uOVwz2V2-oli4pTqQnG5p4AA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

This week, affected by the ongoing geopolitical conflict in the Middle East, most sectors in the A-share market faced pressure, with only 2 industries achieving gains and 29 industries experiencing pullbacks. The communication and banking sectors were the only two that rose, increasing by 2.10% and 0.36%, respectively; among them, the computing hardware sector, including optical modules, was buoyed by positive news from NVIDIA's GTC conference, remaining resilient against market pullbacks and attracting funds due to performance certainty. Meanwhile, in the context of the continued blockade of the Strait of Hormuz and rising oil prices, some risk-averse funds flowed into the banking sector. The non-ferrous metals, basic chemicals, and steel sectors saw significant withdrawals, with declines exceeding 10% during the week, primarily influenced by rising oil prices boosting inflation expectations and cooling expectations for Federal Reserve interest rate cuts, leading to substantial pullbacks in precious metals like gold and silver. Overall, the A-share market had poor profit-making effects this week.

![Image](https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OYyeXdQXiokQP_ej5t-EO57TKSFqOf7HVWSlxylSnVs6MAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

**(2) Fund Market**

This week, influenced by the escalation of the geopolitical conflict in the Middle East, the A-share market continued to decline, and the fund market weakened in tandem. Except for QDII funds and money market funds, all other types of funds recorded negative returns during the week. Global risk assets were suppressed by the Middle East events, and overseas markets maintained a volatile trend this week, with QDII funds slightly rising by 0.22%; affected by the A-share pullback, equity funds and mixed funds performed poorly, falling by 2.35% and 2.53%, respectively; bond funds decreased by 0.11%, with the decline expanding compared to last week; money market funds slightly increased by 0.02%, maintaining the same growth rate as last week. From the distribution of market index, among the Shenxi and Huxi fund indices, the Lefu Fund Index, Guozheng Fund Index, and Fund Index all recorded declines of over 2%, indicating poor profit-making effects for equity funds overall this week.

![Image](https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/O7ZJhbzVfmzR9uw3fTunySrDrUN-PzH6jOVl7GC3_dPhoAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) This week, the central return rate of funds has shown significant divergence. Affected by geopolitical conflicts, rising oil prices have increased inflation expectations, putting pressure on global risk assets, leading to a pullback in both the equity market and precious metals sector. The central return rate for commodity funds is -7.08%, significantly down 6.86 percentage points from last week due to rising inflation expectations and weakened expectations for Federal Reserve interest rate cuts, which have pressured precious metal prices. The central return rates for equity funds, mixed funds, and QDII funds are -2.98%, -3.01%, and -0.85%, respectively, down 4.04 percentage points, 3.36 percentage points, and 1.01 percentage points from last week, showing a significant weakening compared to the previous week. The central return rates for bond funds and money market funds are 0.05% and 0.02%, respectively, making them the only two types of funds with positive return rates. From the perspective of annual return rates, money market funds maintain stable annual returns, while other types of funds have seen varying degrees of decline in annual returns.

![Image](https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OJoe_UD5JLeNjdMNn8_lnj2X4UhRSnloKFzo8lo9H9cdkAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

**III. Capital Trends in A-shares and Fund Markets**

**(1) A-share Market**

This week, the main capital in the A-share market showed a net inflow trend, with a total net inflow of 34.696 billion yuan, although the scale of net inflow has contracted compared to last week. From the perspective of Shenwan's first-level industry, 18 industries experienced net inflows of main capital in the past week, while 11 industries saw net outflows. In terms of net inflows, the power equipment, telecommunications, and public utilities sectors topped the list with net inflows of 20.226 billion yuan, 14.889 billion yuan, and 14.279 billion yuan, respectively. The AI computing hardware sector, which has high performance certainty, and the new energy sector, which benefits from rising oil prices and has energy substitution logic, have become the core directions for capital allocation. In terms of net outflows, the basic chemicals, defense and military industry, and steel sectors saw the largest net outflows, with net outflows of 12.232 billion yuan, 6.541 billion yuan, and 5.255 billion yuan, respectively.

**(2) Fund Market**

This week, a total of 24 funds opened for subscription, involving 11 fund companies including Great Wall, E Fund, Huaxia, Southern, Huitianfu, GF, and Tianhong, with a total subscription scale of 23.491 billion yuan. In terms of fund type distribution, the products opened for subscription this week include 8 actively managed equity funds, 9 index funds, 4 "fixed income +" funds, 1 money market fund, and 2 FOF funds. Overall, the number and scale of funds opened for subscription this week remain relatively low.

**IV. Market Temperature**

From the perspective of valuation percentiles over the past five years, among the major broad-based indices in the A-share market, all indices except the Sci-Tech Innovation 50 have seen a decline in valuation, with the overall market valuation at historically absolute high levels. Specifically, the valuation percentiles for the Shenzhen Index, CSI 500, SSE Index, Sci-Tech Innovation 50, and National Index 2000 are all at historical highs above 90% The valuation percentiles of the CSI 300 and SSE 50 are above 80% of their historical range; only the ChiNext valuation percentile is relatively low at 57.82%. Currently, the A-share market shows significant structural differences in valuation, with growth-style sectors having higher valuations than value-style sectors, small-cap stocks having higher valuations than large-cap stocks, and the Shanghai market having higher valuations than the Shenzhen market. The future upward space of the market may mainly depend on the strength of policy catalysts and the pace of fundamental recovery.

![Image](https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OGsMLjEBxlvdKtaRoFNPZqluBCtWNQfSuHL7UfjVwayYgAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

From the perspective of valuation percentiles in the Shenwan first-level industry, as of the close on March 20, there are 5 sectors in the A-share market with upward valuation adjustments, while 26 sectors have downward valuation adjustments, with the average sector valuation percentile declining by 3.88 percentage points. Specifically, the real estate, banking, and transportation sectors have the largest upward valuation adjustments; the non-ferrous metals, steel, and food and beverage sectors have the largest declines in valuation percentiles. The median sector valuation is found in the transportation sector at 53.20%, which has increased compared to before.

![Image](https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OTN_CeP3ccn9y9QI5ejz5F8g3_Pdt8mVL915jZn6GxQ_MAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

From the perspective of the stock-bond cost-effectiveness over three years, as of March 20, the ratio of the inverse of the total A-share price-to-earnings ratio to the 10-year government bond yield (1.82%) is 2.41, a month-on-month increase of 0.06. The historical average of this indicator is 2.59, currently at a moderate position over the past three years, with a historical percentile value of 35.95% (i.e., the time when the cost-effectiveness is higher than 35.95%), a month-on-month increase of 6.34 percentage points. The historical percentile values of the stock-bond cost-effectiveness for the CSI 300, CSI 500, CSI 800, and CSI 1000 are 65.43% (month-on-month +3.31 percentage points), 15.15% (month-on-month +5.92 percentage points), 51.52% (month-on-month +10.34 percentage points), and 41.05% (month-on-month +16.95 percentage points), respectively. Overall, the stock-bond cost-effectiveness of the A-share market has improved compared to the previous period, mainly due to a significant pullback in the equity market during the week; currently, the probability of making a profit by buying and holding A-shares for three years is 74.07%, a slight decrease of 0.16 percentage points; the 10Y government bond yield has increased by 0.80 basis points month-on-month.

![Image](https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OLJQbkFr8GlbPJH1OL2ZwMc0UiDESsx0CT1ALiIWxGe3QAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

【Note: The market has risks, and investment requires caution. Under any circumstances, the information or opinions expressed in this subscription account are for the purpose of opinion exchange only and do not constitute investment advice to anyone. Unless specifically noted, the research data in this article is supported by Tonghuashun iFinD.】 This article is original from the WeChat public account "Xingtu Financial Research Institute," authored by researchers Fu Yifu, Wu Zewei, and Gao Zhengyang.

Editor: Hu Wei

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