The Shanghai Composite Index tested bottom twice, with banks and petrochemical companies supporting the market! What happened?

On March 26th, after two consecutive days of rebound, the A-shares faced resistance and declining volume, leading to a second bottom test. In the afternoon, the Shanghai Composite Index fell more than 1%, losing the 3,900-point level, with over 4,600 stocks declining.

On the market, heavyweight sectors such as banking, petrochemicals, and utilities provided support, moving against the trend with gains. The Dividend Index outperformed the ChiNext and Micro-cap indices.

However, as the “decline → rebound → decline” three-phase pattern completes, the short-term risk of a significant market drop is low. After a healthy correction, the market is expected to enter the second stage of a bull market driven by profits.

Under the trend of shrinking divergence between large and small caps and a dominance of certainty, investors can consider buying the large-cap value index—CSI 300—during dips. It includes high-quality blue-chip stocks with stable fundamentals and high dividend yields. This index serves as a long-term core holding for domestic and international institutions and is the preferred asset for “quasi-hedging” funds during extreme market conditions.

As of now, there are up to 30 ETFs tracking the CSI 300 index. Among them, the Huaxia CSI 300 ETF (510330.SH), managed by Huaxia Fund, has good liquidity and the lowest management fee at 0.15% per year. Off-exchange fund investors can also consider dollar-cost averaging into the Huaxia CSI 300 ETF Connect C (005658.OF), which has no subscription fee and no redemption fee if held for more than 7 days.