On Thursday, China's A-shares fluctuated and closed lower, with the Shanghai Composite Index falling by 1.09% and both the Shenzhen Component Index and the ChiNext Index dropping by more than 1.3%. The ongoing concerns about energy security sparked by the Iranian conflict led to high international oil prices, bolstering the oil and gas sector in A-shares, which rose against the trend. According to Gelonghui data, the S&P Oil & Gas ETF Huashang (159518) performed outstandingly, with a single-day increase of 6.62%. Meanwhile, the total trading volume shrank to 1.957 trillion yuan, reflecting a clear risk-averse sentiment in the face of the highly uncertain geopolitical environment and the impending Federal Reserve decision next week.
Market Performance
Today, risk aversion dominated the market. The expected tech embargo and a retreat in the computing power leasing theme led to a collective sell-off in tech stocks, with the China-South Korea Semiconductor ETF (513310) slumping by 3.83%. Traditional sectors such as insurance, environmental protection, and military industries were among the biggest losers. However, with the situation in the Middle East damaging the Persian Gulf's oil export capacity, energy-related assets were strongly supported. Besides Huashang’s Oil & Gas ETF, the energy chemical ETF Jianxin (159981) also rose by 3.20%.
Industry Impact
In terms of cross-market asset allocation, overseas biotechnology and Hong Kong dividend assets demonstrated some defensive qualities. The S&P Biotechnology ETF Huashang (159502) increased by 1.46%, and the Saudi ETF Huatai-PineBridge (520830) slightly rose by 0.44%. Notably, long-duration treasury bonds were favored by risk-averse funds, with the 30-year Treasury ETF Pengyang (511090) rising by 0.23%. Analysts believe that, given the expectation that energy prices might trigger secondary inflation, the attractiveness of high dividends and physical assets is significantly increasing.
Investment Outlook
Currently, more than 4,400 stocks in both markets have fallen, and the reduced trading volume indicates a strong wait-and-see sentiment. Investors are closely monitoring the real-time navigation situation in the Strait of Hormuz and the upcoming first-quarter macroeconomic data. The strong rise of oil and gas sectors and safe-haven assets stands in stark contrast to the weakness of the broader market, suggesting that in the short term, market trends may continue to shift toward value defense and resource inflation logic.
