A-share market pulled back after hitting higher levels! Optical modules plunged sharply, the Guangguang (high-light) ChiNext Artificial Intelligence ETF fell over 4%! Large financials surged, Huabao Fund Banking ETF gained for six consecutive days against market trends

On March 17, the A-shares continued to fluctuate, with all three major indices closing lower. The Shanghai Composite Index fell 0.85% to 4,049.91 points, marking four consecutive days of decline. The Shenzhen Component Index dropped 1.87%, and the ChiNext Index declined 2.29%. Market turnover was 2.22 trillion yuan, shrinking for the fourth consecutive day, with over 4,500 stocks in the market in the red.

In the sector, technology stocks all declined, with optical module CPO leading the way. The "Optical"创业板 Artificial Intelligence ETF (159363) plummeted 4.34%, the largest single-day drop in nearly four months, with funds rushing in to buy 50 million units at the lows. Analysts pointed out that Nvidia’s new generation chips are expected to be launched around 2028, with a longer implementation cycle and limited short-term performance support. Market sentiment may be affected, but the long-term growth logic of the industry remains unchanged.

Affected by fluctuations in commodity prices and infrastructure investment pace, cyclical sectors experienced increased volatility. Chemical ETFs (516020) and non-ferrous metals ETFs (159876) continued to decline, with daily declines of four and five consecutive days, respectively.

The market may see the emergence of “Ant Group Securities,” with long-awaited financials leading the rally again. The top-flow券商ETF (512000) surged 3% early in the session, and the 10-billion-yuan bank ETF (512800) rose against the trend for six consecutive days. On the evening of the 16th, Yao Cai Securities Finance announced that the tender offer initiated by Ant Group had been approved by relevant authorities, with settlement expected by March 30.

In Hong Kong stocks, the narrative of “returning funds from the Middle East” cooled down, and the market retreated after a rally. The Hang Seng Index rose 0.13%, after initially gaining 1.6%. The Hang Seng Tech Index fell 0.08%, after reaching a high of 2.36% earlier. Chip stocks, which led yesterday, turned downward, with the only Hong Kong stock information technology ETF (159131) retreating 1.17%. Tech giants showed divergence in the afternoon; the Hong Kong internet ETF (513770), a core AI asset, lost its 20-day moving average.

The healthcare sector also experienced volatility. The Hong Kong Stock Connect Healthcare ETF (159137) rose as much as 3.38% in the morning and closed up 0.44%, successfully extending gains. The Hong Kong Stock Connect Innovation Drug ETF (520880), which holds 100% innovative drug R&D targets, traded actively with a volume of 515 million yuan, ending flat. Analysts believe that the Hong Kong healthcare sector has undergone sufficient adjustment, and the current trend in healthcare across multiple fields remains positive. The logic of the innovation drug sector remains solid, and bottom-region opportunities are worth noting.

【ETF Hot Topics Review】Next, let’s focus on the trading and fundamentals of several sectors: A-share banking,创业板 AI, and Hong Kong healthcare.

1. Six consecutive days of gains against the trend! The Huabao Fund’s 10-billion-yuan Bank ETF (512800) rose nearly 1% again. Fund manager: Multiple positive triggers support the banking sector now.

The banking sector continues its strong performance, with the top-flow bank ETF (512800) rising nearly 1% in the market, marking six consecutive days of gains. Most bank stocks rose, with CITIC Bank up over 3%, ICBC and Bank of China up nearly 2%, and Nanjing Bank, Agricultural Bank of China, and Postal Savings Bank up over 1%.

Recent counter-trend performance has attracted capital attention. Data from the Shanghai Stock Exchange shows that the bank ETF (512800) saw a net inflow of 196 million yuan over the past two days.

Fund manager Feng Chengcheng of the Bank ETF (512800) stated that the current adjustment of the banking sector is quite sufficient. From the perspectives of fundamental certainty and stability, dividend value, and defensive style, there are positive triggers for the sector.

In terms of market style, ongoing US-Iran conflicts have exceeded expectations, reducing market risk appetite and prompting funds to seek certainty. Assets that can hedge risks, like banks in the recovery phase, are in higher demand.

Fundamentally, the quarterly revenue growth rates of banks in 2025 are significantly better than in 2023 and 2024, with many companies’ performance reports exceeding expectations. As revenue growth pressures ease, the inflection point for bank income is more certain. The overall performance of the banking sector is expected to stabilize and improve in 2026 compared to the past two years.

On the liquidity side, from Q3 2025 to January this year, the demand to reduce holdings via broad-based ETFs has weakened, easing liquidity pressures on the sector. There is a reversal logic in trading style, and current levels have some safety margins.

The bank ETF (512800) and its associated funds (Class A: 240019; Class C: 006697) passively track the CSI Bank Index, which includes 42 listed banks in A-shares, making it an efficient tool for tracking the overall banking sector. The latest size exceeds 11 billion yuan, with an average daily turnover over 800 million yuan since 2025, making it the largest and most liquid among the 10 banking ETFs in A-shares.

2. Tanfeng Communications plunges over 10%, unexpected setback in the computing power sector! Huabao Fund’s创业板 AI ETF drops 4%, attracting buying interest! Market overreacts?

The computing power sector experienced an unexpected sharp decline, with optical module CPO seeing a sudden correction. Leading stocks like Guangku Technology, Changxin Bochuang, and Tanfeng Communications fell over 10%. Other stocks such as Tachen Photonics, Zhishang Technology, Ruijie Networks, Liante Technology, and Yixin Sheng also declined over 5%.

In popular ETFs, the创业板 AI ETF (159363), heavily weighted in optical modules, weakened in the afternoon, dropping 4.34%, the largest single-day decline in nearly four months, breaking below the 60-day moving average. The trading volume was 574 million yuan, with funds rushing in to buy 50 million units at the lows.

Nvidia announced multiple technological breakthroughs at GTC, but A-share sectors related to computing power and optical modules declined unexpectedly, drawing market attention. Analysts suggest that Nvidia’s new architecture may combine “optical and copper” interconnects, leading to a systemic revision of AI connectivity expectations. Nvidia’s new chips are expected to be launched around 2028, with a long implementation cycle and limited short-term performance support, which has affected market sentiment.

From a medium- to long-term perspective, the decline today is mainly due to short-term sentiment and capital rhythm adjustments, and the long-term growth logic of the industry remains intact.

Huaxi Securities noted that, at present, external geopolitical risks persist, and market risk appetite has decreased, which may influence short-term volatility. However, AI remains a key investment theme. Currently, AI is in the scale-up acceleration phase, with a gradually expanding supply of related computing chips. The demand for tokens driven by application development is still accelerating, and underlying infrastructure like optical modules is still in expansion.

By seizing AI hot events, investors can quickly deploy “computing power + AI applications” through创业板 AI ETF (159363) and off-market connect funds (Class A: 023407, Class C: 023408), directly benefiting from the explosive growth of AI commercialization. The sector allocation shows about 60% in computing power (optical modules and IDC leaders) and about 40% in AI applications, representing both core “computing power” and genuine “AI application” exposure.

3. Rallying then retreating! CXO and internet healthcare stocks support the market, Huabao Fund’s Hong Kong Stock Connect Healthcare ETF (159137) continues to rise! Innovation drugs diverge, 520880 volume surges and closes flat.

Hong Kong stocks surged then retreated, with the healthcare sector not immune.

The Hong Kong Stock Connect Healthcare ETF (159137) rose as much as 3.38% in the morning and closed up 0.44%, successfully extending gains. CXO and internet healthcare stocks led the rally, with Genesys Biologics up 3.74%, and the WuXi group stocks all gaining. JD Health and Alibaba Health also closed higher, and Ping An Good Doctor rose 2.77%.

Analysts point out that the healthcare sector currently offers multiple investment opportunities. The CXO industry benefits from a rebound in overseas orders and domestic capacity clearing, with continued high growth and valuation recovery potential. Medical devices benefit from policies supporting domestic upgrades and overseas expansion, with frontier areas like brain-machine interfaces and AI imaging driving ongoing innovation. Internet healthcare is also improving operational efficiency amid deeper medical insurance reforms, with clearer profit growth trajectories.

Innovation drugs show similar trends. The Hong Kong Stock Connect Innovation Drug ETF (520880), which holds 100% innovative drug R&D targets, traded actively with a volume of 515 million yuan, closing flat after reaching 3% intraday.

Leading innovation drug stocks diverged; Triumphant Pharmaceutical led the gains, rising over 8% at peak, with FDA approval for its ActRIIA/ActRIIB bispecific antibody SSS67 to start clinical trials. BeiGene and China Biologic Medicine declined.

From an industry perspective, recent data from domestic innovative drugs at academic conferences have been promising. Huayuan Pharma noted that by 2026, the next-generation immuno-oncology therapy IO2.0 will undergo further validation, with continued investment opportunities in IO iteration. The sector’s logic remains strong, and bottom-region opportunities are worth attention.

In terms of timing, Hong Kong healthcare stocks have been adjusting since September last year and are now at a stage low, with leading stocks offering high value. For those looking to position for a rebound, two T+0 tools are recommended:

• For healthcare, choose the Hong Kong Stock Connect Healthcare ETF (159137), with about 70% in CXO + AI healthcare, including innovative drugs and medical devices (such as brain-machine interfaces). Top holdings include JD Health and Alibaba Health.

• For innovative drugs, choose the Hong Kong Stock Connect Innovation Drug ETF (520880), fully allocated to innovative drug R&D companies, with over 70% in top holdings, emphasizing leading positions.

Data sources: China Securities Index Co., Shanghai and Hong Kong Exchanges, etc. Note: “The only one in the entire market” refers to the ETF tracking the CSI Hong Kong Stock Connect Information Technology Composite Index.

*Institutional views referenced from Huaxi Securities “Focus on Major AI Conferences and Exhibitions This Week” and Huayuan Pharma 20260316 report on catalytic opportunities in IO2.0.

Note: ETF funds do not charge sales service fees. When investors subscribe or redeem fund units, brokers may charge commissions up to 0.5%, including related fees from exchanges and registries. For detailed fee rates, see each fund’s legal documents.

Risk warning: The Hong Kong Stock Connect Information Technology ETF passively tracks the CSI Hong Kong Stock Connect Information Technology Composite Index, launched on November 14, 2014, and published on June 23, 2017. The Hong Kong Internet ETF tracks the CSI Hong Kong Stock Connect Internet Index, launched on December 30, 2016, and published on January 11, 2021. The Hong Kong Stock Connect Innovation Drug ETF and its linked funds track the Hang Seng Hong Kong Stock Connect Innovation Drug Select Index, launched on December 31, 2020, and published on July 17, 2023. The CSI Hong Kong Stock Connect Healthcare Theme Index was launched on December 31, 2018, and published on July 21, 2022. The stocks mentioned are for objective index component listing only, not recommendations or endorsements. All information (including stocks, comments, forecasts, charts, indicators, theories, etc.) is for reference only. Investors are responsible for their own investment decisions. The views, analysis, and forecasts in this article do not constitute investment advice. The company is not responsible for any direct or indirect losses resulting from the use of this content. Investors should carefully read the fund’s legal documents, understand the risk-return profile, and choose products suitable for their risk tolerance. Past performance does not guarantee future results. The risk levels of the funds mentioned are R4—medium-high risk, suitable for aggressive (C4) and above investors; others are R3—medium risk, suitable for balanced (C3) and above investors. Suitability opinions are subject to sales institutions’ assessments. The legal entities selling these funds will evaluate risks according to relevant laws and regulations. Investors should pay attention to the suitability opinions issued by fund managers and sales institutions, which may differ. The risk ratings of the funds may vary due to different considerations in the fund contracts. Investors should understand the risk-return profile and choose carefully based on their investment goals, horizon, experience, and risk capacity. The China Securities Regulatory Commission’s registration of these funds does not imply any judgment or guarantee of their investment value, market prospects, or returns. Investment should be cautious.