Top 10 Institutions Discuss the Market: External Disturbances May Gradually Weaken, Market Performance Worth Expecting

This week, the Shanghai Composite Index fell 0.93%, the Shenzhen Component Index dropped 2.22%, and the ChiNext Index declined 2.45%. How will the A-share market perform next week? We have summarized the latest investment strategies from major institutions for investors’ reference.

Everbright Strategy: External Disruptions May Gradually Weaken; Market Performance Worth Expecting

External disturbances may gradually diminish, making market performance worth anticipating. Although the conflict in the Middle East remains highly uncertain, the sentiment impact on the domestic market may have already passed its peak, and the market could return to its own rhythm. Currently, the overall tone of the “Two Sessions” is stable, which may lay a solid policy foundation for stock market gains. Additionally, the next month will be a period of intensive data and policy verification. Overall, opportunities in the equity market still outweigh risks, and performance is promising. Structurally, focus on hot topics, with short-term attention on Middle East developments, and medium- to long-term focus on growth and pro-cyclical sectors. Due to the conflict, risk-averse assets and commodities may perform in the short term. In the medium to long term, focus on growth sectors benefiting from sustained industry heat and increased risk appetite in spring markets, such as humanoid robots and AI. Pro-cyclical sectors will benefit from strong commodity prices and policy support, especially in resource-related and offline service areas with potential for continued price increases.

CITIC Strategy: Price Increases as a Catalyst; Increase Low-Valuation Exposure

This spring’s market volatility saw two sharp rises and falls: one after New Year’s, when investor sentiment surged to 99.9 on January 13 (scale 1-100), followed by a margin increase in financing requirements and ETF redemptions, bringing sentiment down to 43.6 by February 13; the other after the Spring Festival, when the market surged past 4200 points, then quickly cooled with the outbreak of US-Iran tensions. Historically, spring market surges are often narratives during earnings vacuums, with sentiment and expectations declining after the Two Sessions and the start of annual and quarterly reports, while fundamentals gain importance. The current Middle East conflict may accelerate market cooling. For high-position absolute return funds, increased uncertainty and a year-long upward trend may lead to selective de-risking and structural adjustments, especially in high-valuation, hot sectors.

China Galaxy Strategy: From “15th Five-Year Plan” to 2026, A-Share Market May Experience Volatility with Main Themes

Early-week volatility in A-shares is not a trend reversal but a short-term sentiment release amid external pressures. The long-term upward trend remains intact, gradually shifting from “emotion-driven” to “fundamentals-driven,” characterized by “oscillation digestion, momentum enhancement, and structural focus.” The 2026 government work report emphasizes domestic demand, cultivating new growth drivers, and technological independence, supporting structural opportunities. The upcoming release of the “15th Five-Year Plan” will clarify long-term investment themes, channeling capital into strategic sectors. Additionally, the intensive disclosure of 2025 annual reports and 2026 first-quarter reports will be key, with earnings surprises attracting capital focus.

GF Strategy: US-Iran Tensions and Post-Two Sessions Market Outlook

In the medium term, visibility and predictability are increasing. First, US stock valuations are close to tech bubble peaks, with resilient long-term US bond yields, and both are sensitive to inflation expectations. Second, difficulty in US rate cuts will impact the economy, affecting AI financing costs, consumer credit, and mortgage rates, thus restraining demand. Third, historical parallels from the 1990s tech bubble and Kosovo war show oil prices rising, Fed rate hikes, tech valuation compression, and US market declines. Fourth, in December 2025, Trump highlighted “prices” as a key mid-term election issue, with the Republican focus on living costs, suggesting ongoing war impacts are not sustainable before the 2026 elections. Globally, the non-US asset bull market in 2026 is unlikely to be overturned by geopolitical tensions. We remain optimistic about Chinese stocks, expecting a “Davis double play” with US markets. Once short-term geopolitical risks subside, the market may present the best bottom-fishing opportunity of the year.

Shenwan Hongyuan Strategy: Transition from “First Phase Up” to “Range Oscillation”

The resonance of US-Iran conflict and “Halo trading” is a short-term core driver. Current mainstream expectations for these factors are unlikely to extend mid-term. While short-term disturbances are feared, the inevitability of mid-term hedging is underestimated. It’s not yet time to adjust mid-term outlook. The market is in a transition from “first phase up” to “oscillation within a range,” with short-term shocks acting as triggers. The “two-phase rise” involves digesting valuations through earnings and time, improving cyclicality, and industry trends crossing stages, with residents increasingly allocating to equities. The focus remains on tangible opportunities: sectors with visible growth and excess returns, while sectors lacking new catalysts may remain weak.

Huajin Strategy: Has the Spring Market Ended?

Currently, the spring rally in A-shares may still continue in the short term. (1) Policies remain relatively supportive, and external risks may ease marginally. First, domestic policies are positive, with the Two Sessions emphasizing innovation and expanding domestic demand, likely leading to further policy implementation. Second, external risks are easing, with US-Iran tensions subsiding and potential US-China diplomatic improvements. (2) Liquidity may remain loose. The Fed may cut rates within the year, keeping the dollar index low short-term, and Chinese authorities may cut RRR or interest rates. (3) Earnings expectations could improve, with economic recovery continuing and earnings growth supporting the rally post-Two Sessions. (4) Market sentiment indicators and sector rotation suggest the spring rally is not over: market metrics like gains, turnover, and trading volume are not at extremes, and sectors like consumer and financials still have room to catch up.

Dongwu Strategy: The Current Conflict’s Transmission Path to A-shares May Resemble Russia-Ukraine

Historical review since 2015 shows geopolitical events typically cause short-term shocks, quickly absorbed weekly, not dominating major asset trends. However, the 2022 Russia-Ukraine conflict broke this pattern, evolving into a prolonged war that pushed oil prices higher and created a new transmission path: rising oil prices → imported inflation expectations → Fed tightening → dollar liquidity deterioration → pressure on A-shares. The current conflict’s transmission path is somewhat similar to Russia-Ukraine. Strategies should monitor oil prices with three approaches: 1) Neutral hedging with tech and energy if conflict remains contained and oil remains volatile, favoring AI tech and resource sectors; 2) Risk-averse reduction of tech exposure if conflict prolongs, Strait of Hormuz remains blocked, oil prices stay high, and US dollar weakens, potentially causing tech corrections; 3) Aggressive stance maintaining tech positions if oil prices spike sharply and expectations of US intervention rise, betting on oil price correction and rate cuts.

Zhejiang Strategy: Market Oscillation and Growth Divergence; Focus on Structural Shifts in Large Caps

As geopolitical tensions persist and inflation expectations rise with oil prices, global markets are under pressure. Given the complex evolution of Middle East conflicts and asset volatility, A- and H-shares are expected to undergo oscillations. The A-share weighted indices (e.g., Shanghai Composite, CSI 300) have been consolidating since mid-January, with structural adjustments likely stabilizing after mid-March. Growth indices (e.g., CSI 500, CSI 1000, Guozhen 2000) have shown MACD divergence and large gains since last year, facing earnings pressure in earnings season, likely stabilizing after April. Among H-shares, the Hang Seng Tech Index rebounded near the 500-day moving average after a rapid decline but still needs consolidation. Despite recent volatility, the longer-term outlook remains optimistic for a “systematic slow bull.”

Zhongtai Strategy: Post-Geopolitical Turmoil, How Will Major Assets Evolve?

The rapid deterioration of Middle East geopolitics, especially since last weekend’s US-Israel joint strikes on Iran, has significantly impacted global assets. Oil prices surged sharply, and major economies like Japan and Europe experienced severe declines. A-shares gradually recovered after initial shocks, with main indices bottoming out and rebounding. Value sectors performed relatively well, notably petrochemicals and shipping benefiting from resource demand. TMT sectors declined due to risk aversion. Long-term, global instability will deepen investment in high-end manufacturing and tech sectors, with short-term “shorts, long-term longs.” The government work report aligns with market expectations. As annual and quarterly reports are released and economic data emerge, markets may shift focus to fundamentals. Sectors like AI computing power and robotics, previously hot, face earnings tests, but market attention remains high.

Zhongyuan Strategy: Market Themes Will Focus on Cyclicals and Tech

With the RMB remaining relatively strong and economic expectations improving, China’s assets are increasingly attractive globally. Inflows will support a steady upward trend. The upcoming Two Sessions and the “14th Five-Year Plan” will reinforce the main themes around cyclicals and technology. As the earnings forecast window approaches, sectors lacking earnings support may face pressure, while those with solid fundamentals will attract more capital. The Shanghai Composite may continue to fluctuate slightly, with close attention needed on macro data, overseas liquidity, and policy signals. Short-term opportunities include investments in power grid equipment, auto parts, photovoltaics, and chemical raw materials.

(Article source: Oriental Fortune Research Center)