A-Share Closing Review: Triple Decline! Shenzhen Component Index Falls Over 2%, Utility Gas Stocks Rally Against the Market

On March 19, the three major A-share indices all declined, with the Shanghai Composite Index briefly falling below 4,000 points; by the close, the Shanghai Index dropped 1.39% to 4,006 points, the Shenzhen Component Index fell 2.02%, and the ChiNext Index declined 1.1%. The total market turnover was 2.13 trillion yuan, an increase of 66.2 billion yuan from the previous trading day, with nearly 5,000 stocks falling.

In the market, precious metals, non-ferrous metals, and small metals sectors declined, with China Gold and other stocks dropping over 7%; titanium dioxide sector also declined, led by Jinpu Titanium; lithium mining concept stocks weakened, with Weilong Shares hitting the limit down; chemical and chemical fiber stocks fluctuated downward, with Sanfangxiang dropping over 9%; fiberglass, compound fertilizer, fluorochemical, and steel sectors also saw significant declines. Additionally, Qatar’s energy facilities were attacked, causing a surge in natural gas prices, with gas sector stocks soaring; Tiantou Energy hit the 20% limit-up; oil stocks followed suit, with Tongyuan Oil rising over 8%; coal sector surged, with Shaanxi Black Cat hitting the limit-up; inverter, photovoltaic power generation, and utility sectors led the gains.

Specifically:

The gas sector rose, with Tiantou Energy hitting the 20% limit-up, Kaicai Gas up over 19%, Hongtong Gas and Guo Xin Energy hitting the limit-up.

On the news front, Qatar’s Interior Ministry and Qatar Energy announced on the 18th that Ras Laffan Industrial City was set on fire due to an Iranian missile attack, causing extensive damage with no reports of casualties. According to Al Jazeera, Ras Laffan is the world’s largest liquefied natural gas production facility.

The oil and gas extraction and service sector rose, with Shouhua Gas up over 13%, Lanyan Holdings hitting the limit-up, Tongyuan Oil and Keli Shares up over 8%.

On the news front, Iranian media reported on Wednesday that a large Iranian natural gas plant and some petrochemical facilities were attacked by the US and Israel. Iran announced retaliatory measures and warned of strikes on oil facilities in Saudi Arabia, the UAE, and Qatar, intensifying concerns over further disruptions in energy supply.

The coal mining and processing sector led the gains, with Huaneng Energy and Shaanxi Black Cat hitting the limit-up, Dayou Energy, Antai Group, and China Shenhua rising over 4%.

CITIC Construction Investment pointed out that escalating geopolitical conflicts cause fluctuations in international oil prices. If the situation persists long-term, it could present strategic opportunities for China. Relying on a “coal + new energy” dual-pillar energy system, China can both secure its energy safety bottom line and potentially lead in the global energy transition. Policy support and external environment changes are resonating, continuously enhancing the long-term value of the coal sector.

The precious metals sector plummeted, with China Gold, Shanjin International, and Shandong Gold dropping over 7%, and Hunan Silver and Zhaojin Gold falling over 6%.

On the news front, the Federal Reserve’s meeting proceeded as expected, maintaining the federal funds rate target range unchanged, with the dot plot indicating policymakers expect only one rate cut by 2026 (25 basis points), consistent with December last year’s forecast. The market interprets this as a clear hawkish signal: rate cut expectations have been significantly delayed, with rate futures showing traders have pushed the first cut to April 2027. The strengthening dollar directly raises the cost for non-dollar holders to buy gold, while the high-yield environment increases the opportunity cost of holding gold—investors prefer interest-earning assets over non-yielding gold.

The titanium dioxide sector declined, with Zhenhua Shares hitting the limit-down, Guocheng Mining (rights protection) dropping over 8%, Jinpu Titanium over 6%, and Annada over 5%.

The chemical fiber sector saw significant declines, with Sanfangxiang dropping over 9%, Tongkun Shares nearly 9%, and HuiLong New Materials, Xin Fengming, and Shuangxin Materials falling over 8%.

On the news front, Sanfangxiang issued a risk warning on March 19, noting that its stock price rose 61.33% from March 11 to March 18, with five consecutive daily limit-ups, followed by short-term profit-taking.

Looking ahead, China Merchants Securities believes that short-term geopolitical disturbances and rising nationalism support the strategic value of resource commodities. In the medium to long term, ongoing “anti-involution” policies, potential resonance between Chinese and U.S. demand, and the return of the gold shadow anchor could accelerate PPI into positive territory. They recommend focusing on segments with sustained price increases, such as power equipment, crude oil, chemicals, precious metals, coal, and semiconductors.