Shanghai Composite Index drops 0.71% at midday, seed industry concept stocks rise against the market trend

China Securities Journal, March 16 — On the morning of March 16, the three major A-share indices fluctuated, with the Shanghai Composite and Shenzhen Component Index once falling more than 1% during trading.

By midday, the Shanghai Composite Index was down 0.71%, at 4,066.40 points; the Shenzhen Component Index fell 0.70%, at 14,181.29 points; and the ChiNext Index rose 0.18%, at 3,316.25 points.

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In terms of sectors, marine fishing, seed production, and viscose fiber led the gains; potassium fertilizer, precious metals, and cobalt sectors declined the most.

The concept of seed industry strengthened against the trend, with Nongfa Seed hitting the daily limit. On March 13, the Ministry of Agriculture and Rural Affairs held a Party Group Meeting. The meeting emphasized the need to intensify efforts to promote the revitalization of the seed industry, focus resources on cultivating breakthrough varieties, and strive for technological independence and self-reliance in seed sources.

Marine products and ocean economy concepts rose, with Oriental Ocean and Shenkai Holdings hitting the daily limit. The storage chip concept was active in parts, with Langke Technology and Shengshi Technology hitting the daily limit.

As of now, the number of advancing and declining stocks in the Shanghai and Shenzhen markets is 1,898 to 3,407; there are 38 stocks hitting the daily limit and 7 stocks hitting the lower limit.

Regarding individual stocks, some stocks hitting the daily limit include: Shun Na Shares (+10.02%), Guosheng Technology (+10.00%), China Oil Capital (+10.02%), Nongfa Seed (+10.06%), and 263 (+9.94%). Stocks hitting the lower limit include: Oriental Tower (-10.00%) and Fenglong Shares (-10.00%).

The top five stocks by turnover rate are: Xihua Technology, Nabaichuan, Agricultural University Technology, Chuanjinnuo, and Hongbaoli, with rates of 46.834%, 39.037%, 31.311%, 30.907%, and 29.670%, respectively.

Shenwan Hongyuan Securities believes that despite repeated expectations of overseas conflicts, the A-share market remains relatively resilient. The previous policies aimed at steady growth have prevented excessive rises, and market expectations for medium-term trends are an important foundation. Meanwhile, the current pricing of the A-share market regarding geopolitical conflicts has improved significantly, effectively integrating short-, medium-, and long-term projections, reflecting changes in relative national strengths and China’s ability to maneuver in a complex overseas environment. The A-share market is embracing “competitive thinking” and adapting to environments with frequent geopolitical conflicts.

Looking ahead, Shenwan Hongyuan Securities states that the A-share market is progressing along its own path. The “two-stage bull market” is unfolding, with overall static valuation levels at historical highs, increasing resistance to valuation expansion. The current market is in a transitional period from a structural bull to a range-bound consolidation, which will serve as a preparatory phase for a full bull market. Structurally, during this phase, the market is not shifting from high to low or switching styles but rather experiencing dissipation within main sectors. Leading sectors and core stocks are entering high-level consolidation. The space for discovering new opportunities is decreasing, and the overall size is shrinking. However, resilient investment opportunities mainly come from extending mainline assets and expanding macro narratives. Before the first-quarter earnings reports, recommendations will focus on “practical realism” (Zhongxin Jingwei APP).