April A-shares "Good Start" Science and Technology Innovation 50 Index rises over 3%; trading logic will gradually shift toward fundamentals-based pricing

April 1, A-shares achieved a strong monthly “good start.” The Shanghai Composite Index rose by over 1% and reclaimed the 3,900-point level; the ChiNext Index rose nearly 2%; and the STAR 50 Index rose by over 3%. On the trading board, most individual stocks rose across the board, with nearly 4,500 stocks going green. Theme-concept stocks such as innovative drugs and components performed one after another, while trading volume was modestly enlarged to 2.01 trillion yuan. Industry insiders analyze that April enters a period of concentrated earnings releases, bringing a key window for fundamental validation. As a result, market trading logic will gradually shift to pricing based on fundamentals, and it is recommended to focus on building positions in high-quality stocks with strong performance.

Risk appetite rebounds as Asia-Pacific stock markets surge

In recent days, market risk appetite has rebounded significantly. Overnight, the three major U.S. stock indexes all closed higher. The Dow rose 2.49% to 46,341.51 points, the S&P 500 index rose 2.91% to 6,528.52 points, and the Nasdaq rose 3.83% to 21,590.63 points. On the first trading day of April, Asia-Pacific markets also launched a major offensive. The Nikkei 225 index surged by more than 5%, and the Korea Composite Index even skyrocketed by 8.44%.

The hot sentiment in overseas markets quickly spread to A-shares. On April 1, the Shanghai Composite Index opened 1.23% higher, the Shenzhen Component Index opened 1.88% higher, the ChiNext Index opened 2.21% higher, and the STAR 50 Index opened 2.73% higher. Subsequently, all major indexes traded at elevated levels. By the close, the Shanghai Composite Index rose 1.46% to 3,948.55 points, the Shenzhen Component Index rose 1.7%, the ChiNext Index rose 1.96%, and the STAR 50 Index rose 3.33%. The combined trading volume of the Shanghai and Shenzhen markets totaled 2.01 trillion yuan, up 19.9 billion yuan versus the previous trading day.

On the trading board, most individual stocks rose across the board. Nearly 4,500 stocks were green, and innovative drugs and components, among other themes, were featured in turn. Within the innovative drugs concept stocks, Guangsheng Tang, Aidi Pharmaceutical, and Ruizhi Medical hit the 20% daily limit; multiple stocks including Chengda Pharmaceutical rose more than 10%; and several stocks including Beida Pharmaceutical and Yibai Pharmaceutical also hit the daily limit. Within the components concept stocks, Benchuang Intelligent and Jingsai Technology both rose by more than 10%, and Zhongjing Electronics hit the daily limit. Semiconductor equipment stocks continued to climb. Huicheng Vacuum hit the 20% daily limit, and Baicheng Shares hit the daily limit. The photovoltaic equipment industry chain saw intraday surge and jump. Laplace touched the “20CM” daily limit and then broke down; Guosheng Technology and Furi Shares also hit the daily limit. In the afternoon, the tourism and hotel concept performed actively, with Jinjiang Hotel and Shoulv Hotel rising more than 8%.

Meanwhile, high-speed rail concept stocks opened higher and then declined. Shenzhou High-Speed Rail broke down after hitting the daily limit, while Eagle Heavy Industry fell sharply. Power stocks adjusted across the board. Neng Taisan, Guangxi Energy, Huitian Thermal Power, and others hit the daily limit on the downside, and Min Dong Electric Power fell by more than 7%. The oil & petrochemical sector followed the decline in international crude oil prices. Keli Shares fell by more than 7%, while Zhongman Petroleum, CNOOC, and Tongyuan Petroleum fell by more than 3%. In addition, sectors including forestry, coal, and highways also weakened.

Seek certainty amid rotation

Allocate positions in high-quality stocks with strong performance

Among the major A-share indexes, the STAR 50 Index stood out on April 1, up by more than 3%. Jufeng Securities Investment Consulting analyzed that this reflects the market’s demand for sentiment repair after the earlier deep overselling in the technology direction. Against the backdrop of no significant easing in overall liquidity and no large-scale inflow of incremental funds, relying solely on sentiment repair is difficult to support technology stocks to sustain a trend-driven rally. If the technology sector is to truly “break the deadlock” going forward, it needs two legs: first, listed companies deliver earnings that exceed expectations, using fundamentals to prove that valuations are reasonable; second, macro liquidity improves further, providing sufficient “ammunition” for high-volatility, high-elasticity varieties.

From the perspective of the market’s structure, Jufeng Securities Investment Consulting believes that the current market shows a pattern in which the rotation of hotspots is accelerating while both high-low switching coexist. Trading value has remained around 2 trillion yuan, further confirming the characteristics of a zero-sum, stock-rotation game. On the one hand, the pharmaceutical sector continues to be strong, and directions such as photovoltaics, computing power leasing, and shipping bloom in multiple places at the same time, showing that capital is still actively looking for breakthroughs to go long. On the other hand, the high-speed rail concept—leading on Tuesday—opened high and then declined, with the decline in the front of the pack. This “one-day trip”-style switching greatly increases the difficulty for short-term operations. For investors, this means that rather than blindly chasing intraday hot themes, it is better to capture the “opportunities created by pullbacks” within the framework of a repairing market. Instead of competing for momentum by chasing highs, take positions on dips, and seek certainty amid rotation.

Dongwu Securities also suggests that in April, investors need to focus on grasping the configuration structure, avoid sectors that are trading at high levels with a relatively long earnings-fulfillment cycle, and dig for medium-term growth and opportunities with certainty of earnings amid uncertainty. On the one hand, the market risk-return profile is asymmetric: over the past year or more, the core logic behind market trading has been a weak U.S. dollar, which has significantly benefited sectors such as technology and non-ferrous metals. If oil prices rise and lift the price center, high-valuation and high-leverage assets may face shocks, driving a structural shift in the market. On the other hand, April enters the period of concentrated earnings disclosures, bringing a key window for fundamental validation. Market trading logic will shift toward fundamental-based pricing. Overall, high-level sectors without earnings support may face valuation pullbacks, while high-quality targets are more likely to deliver excess returns. It is recommended to focus on high-quality stocks with strong performance.

Reporter Chen Hui