Everbright Securities: External disturbances may gradually weaken; market performance is worth looking forward to

Report Summary

This week, the A-share market experienced volatility.

Due to a decline in market risk appetite, the A-share market pulled back this week. With weakening market sentiment and reduced risk preference, major broad-based indices generally declined. Among the main broad indices, the Shanghai Composite performed the best with a change of -0.9%, while the ChiNext 50 performed the worst with a change of -4.9%. Currently, the valuation of the Wind All A Index is at the 94.8th percentile since 2010. In terms of sectors, petroleum and petrochemicals, coal, and utilities performed relatively well.

Key Events This Week

Policy and Meetings: The National Two Sessions opened, with Premier Li Qiang delivering the government work report. On the morning of March 5, the Fourth Session of the 14th National People’s Congress opened in Beijing, where Premier Li Qiang presented the government work report. This year’s report reflects a pragmatic and forward-looking policy orientation.

Economic Data: PMI data for February was released. On March 4, 2026, the National Bureau of Statistics announced February PMI data: Manufacturing PMI at 49.0% (previous 49.3%, expected 49.7%); Non-manufacturing PMI at 49.5% (previous 49.4%). Due to the Spring Festival holiday, corporate production and investment activities slowed down in February, leading to a decline in manufacturing and construction sector confidence, while the service sector rebounded thanks to holiday consumption.

Industry Events: MWC 2026 opened, GTC 2026 will be held from March 16-19, and Huawei held the HarmonyOS Tech Innovation Conference. On the morning of March 2, the Mobile World Congress (MWC 2026) officially opened at Fira Gran Via in Barcelona; according to NVIDIA on March 4, the highly anticipated GTC AI and accelerated computing conference will be held from March 16-19 in San Jose, California; on March 4, Huawei held the HarmonyOS Tech Innovation Conference in Shenzhen.

Overseas Developments: The US and Israel launched attacks on Iran, and Trump officially nominated Waller as the next Fed Chair. On March 2, the US Court of Appeals rejected the Trump administration’s request to delay the tariff refund process; on February 28, the US and Israel launched attacks on Iran; President Trump officially nominated Kevin Waller as the next Federal Reserve Chair.

External disturbances are gradually weakening, and market performance is worth watching.

External shocks are diminishing, making market prospects promising. Although conflicts in the Middle East remain highly uncertain, the period of greatest emotional impact on the domestic market may have passed, and the market is likely to return to its own rhythm. Currently, the overall tone of the Two Sessions is stable, which should lay a solid policy foundation for stock market gains. Additionally, the market will enter a period of intensive data and policy validation over the next month. Overall, opportunities in equities still outweigh risks, and performance is worth期待ing.

Structurally, focus on hot topics, with short-term attention on Middle East tensions, and medium- to long-term focus on growth and pro-cyclical sectors. Due to Middle East conflicts, risk-averse assets and commodities may perform in the short term. In the medium to long term, focus on two main themes: growth, benefiting from sustained industry enthusiasm and increased risk appetite during spring rallies, with attention to humanoid robots, AI, and related fields; and pro-cyclicality, driven by strong commodity prices and policy support, with focus on resource commodities and offline services likely to continue rising.

Regarding hot topics, this week’s “price increase” theme showed notable divergence. We believe that geopolitical risks have not yet fully subsided. Meanwhile, trends such as energy transition and increased AI investment continue, supporting related sectors’ narratives. In the short term, investors can focus on chemical raw materials, agriculture, and other sectors with limited overall gains and relatively low valuations. In the medium term, watch whether crude oil prices stay high for an extended period, which could strengthen the dollar and increase volatility across asset classes.

Risk Analysis: Overseas risks exceeding expectations; historical patterns failing; market sentiment sharply declining.

(Source: Everbright Securities)