Peripheral disturbances are unlikely to easily shake the market’s medium-term upward foundation. Institutions suggest positioning for industry trends moving upward by buying on dips.

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On April 7, China’s A-share market saw its first trading day after the Qingming holiday. During the holiday period, overseas markets such as Japan and South Korea saw choppy but upward movement. International oil prices and gold prices diverged in their trends, and overall market risk appetite improved slightly. Against the backdrop of the continued geopolitical conflict in the Middle East and the still-uncertain outlook for international oil prices, how will the A-share market play out in the second half/after the period remains a closely watched question.

Industry insiders believe that, in the short term, uncertainty from the U.S.-Iran conflict will continue to suppress market risk appetite, but it has not shaken the long-term upward foundation of the A-share market. As a series of positive signals gradually emerge, the market is expected to continue moving higher in the second quarter. For portfolio positioning going forward, in the short term it is still advisable to keep building positions on dips in industries supported by policy and with upward-moving industry trends. The growth direction remains the strongest mainline of this round of行情. Sub-sectors such as AI computing power, semiconductors, memory, and innovative drugs are worth paying attention to.

● By our reporter Hu Yu

Positive signals are emerging

On April 6, China’s A-share market was closed for the Qingming holiday. In overseas markets, Japan and South Korea’s stock markets rose together, and market sentiment saw a slight rebound. According to Wind data, as of the close on that day, the Nikkei 225 index rose 0.55% and the Korea Composite Index rose 1.36%.

In the commodity markets, international oil prices showed a pattern of opening higher and then falling, while international gold prices fluctuated and then rose. According to Wind data, as of 17:00 Beijing time on April 6, the NYMEX crude oil futures main contract fell 1.63% to $109.72 per barrel. The ICE Brent crude oil futures main contract fell 0.76% to $108.20 per barrel. COMEX gold futures prices turned from falling to rising, reclaiming the $4,700 per ounce level, to close at $4,720 per ounce.

Geopolitical conflict in the Middle East once again stirred up turbulence last week, causing pronounced volatility across global equity assets. International oil prices at one point neared the stage-high set during intraday trading on March 9, while international gold prices underwent a significant correction. For China’s A-share market, although it also faced pressure under external risk disturbances, industry insiders believe that the market’s key mid-term low point may already be approaching. With certain positive signals showing up, the market is expected to continue moving higher in a volatile manner in the second quarter.

The strategy team at Shenwan Hongyuan judged that short-term uncertainty from the U.S.-Iran conflict is still suppressing market risk appetite. The market’s second round of testing lows is being realized. If, in the short term, a scenario arises in which the United States lands operations and achieves its tactical objectives and withdraws quickly, then it would constitute a key signal that mid-term macro uncertainty is converging. This also implies that the period during which the U.S.-Iran conflict has the biggest impact on capital markets will come to an end. Coupled with domestic policies to maintain stability in the capital market and market pessimistic expectations accelerating the clearing process, the market may be entering an important mid-term low point.

Regarding the positive signals brewing in the market, Wu Xinkun, chief strategy analyst at Guoxin Securities, believes that on the external front, given the backdrop of rising oil-price “cost-of-fuel” centers, the U.S. economy may face a stagflation risk. Combined with the approaching midterm elections, political pressure brought by the war may constrain the conflict’s continuation. The U.S. side has a demand to end the conflict as soon as possible. From the domestic perspective, current macro policies continue an active stance, and stimulus policies to expand domestic demand are expected to be further stepped up to drive recovery in the economic fundamentals. Meanwhile, China’s manufacturing industry has notable advantages globally, and future exports are also expected to maintain resilience. “Even if the market probes lower again in the future, its downside room may already be limited. The market is expected to continue higher in the second quarter.”

Oil price trend is the key variable

How should investors grasp the pacing of positioning going forward? Is it already the moment to “front-run”? After reviewing industry viewpoints, the reporter found that the current trend in international crude oil prices remains the key variable affecting the market’s near-term structure. Investors can start trying left-side positioning, but they should not be overly aggressive. Sentiment/sector outlook is an important consideration when allocating assets.

In the view of Yang Chao, chief strategy analyst at China Galaxy Securities, a rise in international oil prices lifts global inflation expectations. Delayed expectations for rate cuts lead to a tightening at the margin of global liquidity, which will strengthen the trading logic for the energy substitution sector and the “defensive cushion” role of defensive sectors—while also weighing on the performance of more aggressive sectors such as technology growth. If, later on, expectations for the conflict easing warm up and drive international oil prices to fluctuate lower while expectations for easier liquidity return, that would be beneficial for the repair of the growth stock rally. From the domestic environment, the core logic—policy support, money entering the market, and the re-rating of Chinese assets—has not changed. External conflict has not undermined the long-term upward foundation of the A-share market.

Given that not only both sides of the U.S.-Iran conflict have begun signaling “leaving an exit,” but countries beyond the conflict are also taking more proactive actions, Wei Jixing, chief strategy analyst at Kaiyuan Securities, believes that from a positioning perspective, signals for left-side positioning have already appeared. Investors can be somewhat more proactive than in the prior period, but should not become overly aggressive. If oil prices and related market volatility indicators continue to fall after that, market risk appetite is expected to be further repaired, and the growth direction will still be one of the biggest sources of elasticity during the process of risk-appetite recovery.

April is the period when A-share listed companies’ 2025 annual reports and 2026 Q1 reports are disclosed in a concentrated manner. More signals reflecting corporate fundamentals and sector outlook will be presented to investors, and will become an important clue for capturing structural opportunities.

Deng Lijun, chief strategy analyst at Huaqin Securities, believes that during the market’s bottoming and sideways oscillation phase, sectors with policy support, upward-moving industry trends, and leading performance in earnings growth rankings are relatively advantaged. Currently, those sectors may include electronics, communications, non-ferrous metals, and power equipment, among others. Judging from earnings expectation in the 2026 Q1 reports, the earnings growth rates in sectors such as transportation, non-ferrous metals, electronics, computer software/hardware, and defense/armaments may be relatively high. As for changes in sector sentiment, upstream sectors such as petroleum and petrochemicals, non-ferrous metals, and chemicals may see improved sentiment in Q1, while midstream sectors such as electronics and communications may see some improvement in their Q1 sentiment.

Growth direction remains the strongest mainline

For the allocation direction going forward, Deng Lijun recommends that in the short term investors continue to build positions on dips in sectors supported by policy and with upward-moving industry trends, such as communications, electronics, innovative drugs, non-ferrous metals, and defense/armaments. The subcategories they like include AI hardware, semiconductors, AI computing power, energy storage, commercial aerospace, and so on. For dividend-style sectors, they suggest focusing on coal, power, and banks.

Wei Jixing judges that the growth direction remains the strongest mainline of this round of行情, but investors’ strategies need corresponding adjustment. It is recommended to focus on sub-sectors such as power equipment, energy metals, storage/memory, semiconductors, robots, liquid cooling, Hong Kong-listed internet companies, and innovative drugs. The performance of high-dividend assets in 2026 is expected to be better than in 2025. Sub-directions worth paying attention to include coal, insurance, petroleum and petrochemicals, and transportation. In addition, the recovery opportunities in discretionary consumption and services—such as outdoor sports, tourism, hotels, and catering—are also worth noting.

After the outbreak of this round of conflict, gold—as a traditional safe-haven asset—has fallen “against the trend.” Considering that central banks’ gold purchases are an important support factor for this round’s gold rally, however, in recent times some central banks have engaged in selling gold. To a certain extent, this has triggered market concerns about whether gold prices can rise again.

Lin Yan, macro chief analyst at the Research Institute of Guolian Minsheng Securities, believes that in March, global central banks overall still remained net buyers of gold. The selling by certain central banks does not affect the main trend of central banks purchasing gold. Their gold sales are tactical reductions made for considerations such as temporarily easing fiscal crises, and do not affect the long-term logic that gold prices rise due to the weakening of dollar credit leading to increased central bank gold purchases. The main trend of gold’s long-term rise has not changed.

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