Closed with a broad decline, is the post-holiday outlook uncertain?

（Source: GELUNHUI App）

Source: GELUNHUI

In the last trading day before the Qingming Festival, A-shares failed to deliver “cash bonuses,” and instead ended the day with broad-based declines.

As of the close, the Shanghai Composite Index fell 1%, the Shenzhen Component Index dropped 0.99%, the ChiNext Index fell 0.73%, and the STAR 50 Index declined 0.47%; across the entire market, trading volume was 1.67 trillion yuan, with more than 4,700 stocks down.

As for the reasons, there are mainly three:

Geopolitical conflicts in the Middle East have boosted risk-aversion sentiment, the uncertainty around the Qingming small holiday, and the dense lock-up zone above the 3,900-point level.

For investors holding positions through the holiday, this Qingming Festival is a bit of “extra hassle.”

But since trading has already closed, rather than worrying over a single day’s gains and losses, it’s better to stay calm and review the opportunities and potential risks that may emerge after the holiday.

01

Market watch: Scattered hotspots

The most obvious feature of today’s trading landscape is “chaos”—hotspots rotate extremely fast and there is no clear main theme.

However, within the overall weakness, technology sub-sectors represented by computing power hardware have still managed to strengthen against the trend.

Among them, the computing power hardware concept has been especially prominent.

At the stock level, there are short-term strong stocks that achieved a second consecutive limit-up, trend bullish stocks that have hit 7 out of 9 trading days limit-up, and ChiNext targets that saw 20cm limit-ups.

Meanwhile, the computing power leasing concept has shown localized momentum; the computing power scheduling direction led the market higher; the CPO concept has repeatedly been active. Within that, the OCS (optical circuit switching) direction led.

Behind this lies direct policy catalysis.

On April 2, the Ministry of Industry and Information Technology released the “Notice on Carrying Out a Special Campaign to Empower Small and Medium-Sized Enterprises through Inclusive Computing Power,” which clearly proposes promoting deployments of technical applications such as all-optical switching, reducing network latency from computing power application terminals to servers, and improving interactive application experiences. Particularly worth noting is that for the first time, the MIIT proposed exploring innovative businesses such as a “computing power bank” and a “computing power marketplace,” supporting small and medium-sized enterprises to store idle computing power resources and achieve flexible access through cross-region and cross-cycle scheduling.

This policy signal has been interpreted by the market as an important milestone for computing power services moving toward greater accessibility and market orientation.

The robotics concept has also performed actively, with multiple stocks hitting limit-ups.

These technology sub-sectors strengthening against the trend reflect that even as overall risk appetite falls, capital is still willing to back directions with both strong industry trends and policy certainty.

In addition, the cross-border payments concept was active right at the open, and multiple stocks hit limit-ups.

On the news front, according to the Ministry of Commerce website, under the selective transit system, multiple countries have been granted exemptions from transit fees, and RMB settlement saw the first occurrence of the Strait of Hormuz. Transit fees are settled through intermediary institutions after customs clearance, and the fee is 2 million USD, which can be settled in RMB.

This event marks another breakthrough for RMB in international energy trade settlement, providing a short-term sentiment boost for sectors such as cross-border payments and digital currencies.

The innovative drugs concept rose locally, with some stocks gaining more than 17%.

The catalyst comes from an upcoming international academic conference: the American Association for Cancer Research (AACR) annual meeting will be held in San Diego, United States, from April 17 to 22, 2026. According to reports, this year more than 100 Chinese pharmaceutical companies will appear at AACR, bringing nearly 400 research outcomes.

Innovative drugs have long shown a “conference-driven” characteristic—major data releases often ignite stock-specific rallies, and it is understandable that funds position themselves in advance.

On the downside, the power sector weakened, and coal stocks fell.

This is related both to profit-taking after earlier sharp gains and to concerns in the market about the “seesaw” effect of capital between traditional energy and new energy.

Based on historical patterns and statistics of April market performance from 2021 to 2025, technology sectors generally underperform the broader market each year.

After the holiday, how should April be viewed?

02

Hold the line, wait to strike

U.S. stocks will resume trading on April 6 (next Monday).

A-shares will open on April 7 (next Tuesday).

Hong Kong stocks, at the latest, will only reveal the full picture on April 8 (next Wednesday).

This means that as soon as A-shares open next Tuesday, they will go it alone to face the enormous risks of a full Qingming holiday that the overseas market needs to digest. Even more ominously, April is always a “decision period” for global capital markets.

This year’s April is further compounded by three major extreme variables: the peak game of geopolitical tensions in the Middle East, the pullback in expectations of Fed rate cuts, and the tangible validation of domestic earnings during the corporate earnings season.

Put simply, what global capital fears most right now is a repeat of “stagflation.”

The key intersection of the game is pinned to April 6. According to disclosures by foreign media, Trump’s “final warning” to strike Iran’s energy facilities is set for April 6 in U.S. Eastern Time.

At this time, U.S. stocks have just finished their first trading day after Easter, while in Beijing time it is already 8:00 a.m. on April 7. A-shares are preparing to ring the bell for the post-Qingming opening.

The sentiment piled up during the holiday may be concentrated and triggered. And both sides remain highly tense.

Before the holiday, Trump made tough remarks, claiming that he would “remove Iran within 2–3 weeks and end the war.” What sounds like a “quick victory” stance is, in Wall Street’s view, an extremely dangerous signal: it implies that U.S. forces would have to substantially escalate the intensity of military strikes in a very short time.

Image source: Associated Press

The market’s original fantasy of “talks cooling down” has been completely shattered. The White House is still floating the hope of reaching an agreement, but then the Pentagon turns around and is already considering deploying an additional 10,000 ground troops to the Middle East. Iran’s stance is extremely firm: it not only continues to threaten to blockade the Strait of Hormuz, but there are even reports of strikes targeting Oracle and Amazon’s Middle East data centers.

It is precisely because fear is mounting that the war could rapidly escalate in the short term that global oil prices will go out of control.

Before the holiday, Brent crude had already surged beyond the $109 mark. In just one month, it jumped nearly 34%. If talks fail on the evening of April 6 and triggers actual bombing, oil prices will very likely challenge the historical high of $147.50 set in 2008. Under this harmful supply shock, the global economy is likely to fall into a serious stagflation quagmire.

Once oil prices rise, inflation expectations immediately rebound against themselves.

At this point, if you look at U.S. employment data again, the logic changes completely. In March, the ADP report showed 62,000 new jobs, and wage growth for job changers accelerated to 6.6%. Measured by the yardsticks of the past, those new jobs may look somewhat weak. But the latest research from the Federal Reserve Bank of St. Louis indicates that due to population aging and immigration restrictions, the threshold of new employment needed for the U.S. to keep the unemployment rate stable has already dropped sharply to a range of 15,000 to 87,000.

This means that a monthly employment growth of 60,000 is still, in substance, strong. There are no signs that the labor market is deteriorating.

Inflation is highly sticky, and unemployment rate cannot fall. The rate-cut path that the Fed had hinted at has been completely disrupted, and Wall Street’s expectations for cuts this year have already been slashed to just two times. Even expectations for quantitative tightening (QT) have heated up significantly.

Global U.S. dollar liquidity will be forced to remain stuck in a tightening swamp of “Higher for Longer.” Long-end U.S. Treasury yields remain high, reaching a peak of 4.309%, which creates a huge external drag on the valuation center of gravity for A-shares and Hong Kong stocks.

Now look at China domestically. April is a dense disclosure period for annual reports and Q1 results; the market will shift from “macro theme speculation” back to the “fundamentals—earnings validation” stage. It’s like getting your exam scores back: the promises blown earlier with hot air must be cashed out with real profits.

Based on the already disclosed earnings forecasts, the share of companies in media and computer industries warning of losses is relatively high, and they may face greater adjustment pressure; while the share of companies in the auto and electronics industries giving positive warnings is relatively high, and earnings stability is comparatively better.

Therefore, after the holiday, stock selection should place extra emphasis on earnings certainty.

Latest strategy views from major institutions generally include a few points:

One is hedging assets against stagflation under geopolitical conflict. In the reconstruction of this global pricing system, crude oil, gold, and copper are the absolute sure bets. As long as the alarms in the Middle East are not lifted for a day, resource-related assets will always carry very high upside risk premium.

That’s also why China Petroleum, CNOOC, and Zijin Mining can become “anchor stones” in institutional holdings. In addition, affected by Qatar supply disruptions, the weekly average price of industrial helium surged by more than 30%; industrial gas concepts such as CSSC Shippbuilding & Tech. Gas also have strong opportunities for price games.

Second, the technology main theme still cannot be ignored, but capital is only willing to buy earnings that are visible and tangible. For example, optical modules with sustained strong conditions, fiber optic cables, PCB and upstream components, and storage—there are passive component areas with a “catch-up rally” logic.

Another area worth focusing on is platform-type companies with global competitiveness.

Although they face pressure from trade protectionism, Contemporary Amperex Technology (CATL) and EVE Energy (Safeguarding Rights) remain resilient in their overseas expansion logic thanks to indisputable manufacturing cost advantages. For the CXO leader WuXi AppTec, its TIDES business orders have reached a historical high, and the momentum for a fundamentals turnaround is strong.

03

Epilogue

Overall, the tone of the April market is inevitably one of volatility under pressure and differentiation.

After the holiday, markets may see sharp swings due to overseas volatility, repeated turbulence in the Middle East situation, and pockets of earnings “landmines.”

Especially for Hong Kong stocks, which have the longest trading break.

After Hong Kong stocks open on April 8, they will inevitably face the concentrated build-up and fermentation of non-farm data and the Middle East situation. Because the offshore market is extremely sensitive to U.S. dollar interest rates, the pressure to search for a bottom in the short term is very high, and it may even break below the important 25,000-point level.

In terms of trading rhythm, after the holiday you can prioritize observing the evolution of the Middle East situation and the movement of Brent crude when the market opens. Hold the line, and keep position sizing under control.

In this decision cycle full of historical uncertainty, you need enough patience to wait for Q1 earnings to land, and wait for the right-side signal to give clear cues for action.

In the month of decision, only those who survive have the right to talk about returns. (Full text ends)

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