A-shares closing review | Index rises but then falls back! Chemical industry regains activity

Today, the three major stock indexes rose and then fell, with active trading in small and medium-cap stocks. The micro-cap stock index rose over 3% during the day. The market had a total turnover of 1.1 trillion, at a recent low level, with over 3800 stocks rising. Orient pointed out that looking forward to the market in April, the stock index will continue to explore the bottom trend, but the probability will not be too deep. The market's demand for earnings certainty is gradually increasing, and sector rotation continues to focus on performance. On the market, the biopharmaceutical sector surged, with innovative drugs, traditional Chinese medicine, and brain-machine interfaces leading the way. The chemical industry sector rose again in the afternoon, with multiple stocks like Huarong Chemical hitting the limit up. Military stocks were active, with Jianglong Shipbuilding leading the way. The steel and power sectors fluctuated upwards, with Xinjiang Ba Yi Iron & Steel leading the way. Stocks related to controllable nuclear fusion continued to strengthen, with Hefei Metalforming Intelligent Manufacturing hitting five consecutive limit up days. On the downside, internet e-commerce, precious metals, automobile, and film and television sectors fell the most. Specifically, the biopharmaceutical sector led the market, with stocks like Chengda Pharmaceuticals and Gansu Longshenrongfa Pharmaceutical Industry hitting the 20% limit up. In terms of news, the pharmaceutical industry recently had a series of positive news, with the State-owned Assets Supervision and Administration Commission encouraging state-owned enterprises to carry out mergers and acquisitions in biopharmaceuticals, among others. The National Medical Products Administration issued a consultation document on high-end medical device innovation development. There was also discussion on optimizing pharmaceutical group procurement policies. Investment in stocks related to controllable nuclear fusion continued to strengthen, with Hefei Metalforming Intelligent Manufacturing hitting five limit up days and Shanghai Zhongzhou Special Alloy Materials up 20%. According to CCTV News, China's controllable nuclear fusion technology has made significant progress, with the next generation artificial sun "Chinese artificial sun No. 3" achieving temperatures exceeding one billion degrees for both atomic nuclei and electrons. In terms of individual stocks, 3854 stocks rose in the market, while 1406 fell and 145 remained flat. There were 66 stocks hitting the limit up and 21 hitting the limit down. At the close, the Shanghai Composite Index rose 0.38% to 3348.44 points, with a turnover of 499.4 billion yuan; the Shenzhen Component Index fell 0.01% to 10503.66 points, with a turnover of 632.9 billion yuan. The ChiNext Index fell 0.09% to 2101.88 points. Funds Trends Today, the main capital focused on chemical pharmaceuticals, medical services, semiconductors, and other sectors. Stocks with the highest net inflows included Jiangsu Hengrui Pharmaceuticals, AVIC Industry-Finance Holdings, and Horizon Robotics. News Recap 1. China successfully launched satellite internet technology test satellite on April 1, 2025. 2. National Household Appliances Replacement for Energy-efficient Products teleconference held in Beijing on March 28. 3. Guangdong province actively promotes the construction of the Siasun Robot & Automation Industrial Park. 4. In March, Caixin China Manufacturing PMI reached 51.2, the highest in four months.Percentage point, hitting a new high since December 2024, shows that the production and business activities of the manufacturing industry continue to accelerate expansion. Analysis points out that, from the sub-item data of Caixin China Manufacturing PMI, the manufacturing industry maintains a trend of expansion in supply and demand. The production index in March slightly increased to the highest level in nearly four months in the expansion zone, and the new order index decreased slightly but remained above the critical point. In terms of categories, consumer goods new orders performed particularly strongly, while intermediate goods and capital goods also recorded moderate growth. Compared to the overall slowdown in demand expansion, exports accelerated expansion, with the new export order index for the month rising to the highest level since May 2024 in the expansion zone.1. Guotai Junan: Judging the Market Outlook Guotai Junan pointed out that the market is expected to continue to fluctuate, with a lack of new Xiong'an New Power Technology developments. The uncertainty has increased as trading has been relatively comprehensive, and the stock market is expected to enter a period of consolidation. It is important to remain cautious at this time, as April is a month when the stock market performance is closely watched. With policy expansion efforts and high local enthusiasm for development, it is optimistic about the potential benefits of two new sectors. It is recommended to focus on industries with clear trends and high order fulfillment rates in the technology growth sector. It is also optimistic about cyclical industries that benefit from supply optimization or price increases driven by new demand. The theme of stable and free cash flow is expected to return to focus in the short term, while small and medium-sized companies should be avoided. Themes to watch include autonomous control, aging economy, AI intelligence, and mergers and acquisitions. 2. Huatai: Preparing for the Two "Shoes" to Drop Huatai pointed out that looking ahead, before the two major "shoes" of tariffs and performance period are implemented, it is important to maintain the judgment that the index is in a "consolidation period". Overseas, concerns about stagflation have been exacerbated by US February PCE and consumption data, and it is necessary to pay attention to the uncertainty risks of policy before the implementation of "equivalent tariffs" on April 2nd and the possibility of stronger than expected measures after implementation. Domestically, there is significant pressure on the realization of annual and first quarter performance, with potentially greater pressure on small caps compared to large caps. In terms of allocation, it is recommended to continue to increase allocations in the direction of large caps, dividends, and sectors with high cost-effectiveness that are at low levels and have resilient prospects, such as white goods, aviation, batteries, and engineering machinery; Overall technology remains a mid-term focus, with opportunities to allocate to storage, edge-side AI, and attention on whether XinKailai can become a "DeepSeek" moment in semiconductor equipment. 3. Orient: Stock Indexes Still Maintain a Bottom-Exploring Trend, Sector Rotation Revolves Around Performance Orient pointed out that looking ahead to the market in April, stock indexes are expected to still maintain a trend of exploring the bottom, but it is unlikely to be too deep. Market demand for performance certainty is gradually increasing, and sector rotation still revolves around performance. From a gaming perspective, sectors that attract popularity are undoubtedly still the technology sector, such as TMT. The crowding ratio was as high as 45% previously and has now fallen to around 32%. Some funds bottomed out yesterday, so "technology + dividends" is currently a good investment strategy.