The easing of geopolitical conflicts and the warming of risk appetite highlight the value of core broad-based allocations

The Middle East situation signals a easing of tensions, driving a rapid rebound in global market risk appetite, with overall sentiment in the A-shares market significantly recovering. Funds are gradually flowing back into core broad-based assets. As of 2:25 PM on April 1st, CSI 300 ETF E Fund (510310) increased by 1.51%, CSI A500 ETF E Fund (159361) increased by 1.34%. In individual stocks, Tianfu Communication (300394.SZ) led the sector with a gain of over 10%, while GigaDevice (603986.SH), Luoyang Molybdenum (603993.SH), WuXi AppTec (603259.SH), Dongshan Precision (002384.SZ), and Zhongji Xuchuang (300308.SZ) rose over 5%. Haiguang Information (688041.SH), Weichai Power (000338.SZ), and E Ink Holdings (002463.SZ) also moved higher in tandem. The cooling of external risk aversion sentiments has helped lift the market’s center of gravity steadily, and the broad-based indices’ rebound momentum is gradually strengthening.

On the news front, a key turning point has emerged in the geopolitical tension landscape. The Iranian president stated that, under the premise that demands are met and security guarantees are provided, Iran is willing to end the conflict; at the same time, the U.S. has also clearly planned to conclude the hostilities within 2 to 3 weeks. On March 31, Iranian President Raisi said that, provided the other side satisfies Iran’s demands and guarantees non-aggression, Iran has the “necessary willingness” to end the war. On the same day, U.S. President Trump stated that the U.S. would end the Iran conflict within two to three weeks, and that this move would help lower energy prices.

Previously, the market was under long-term geopolitical disturbances, with risk-averse sentiment elevated, causing the market to fluctuate repeatedly following conflicts. Now, external uncertainties are gradually diminishing, and the market’s main focus is returning to fundamentals. Coupled with solid economic recovery in the first quarter, impressive economic data in January and February, and the PMI in March rebounding above the expansion-contraction line, the foundation for endogenous recovery is solid. Under the resonance of both internal and external positive factors, valuation recovery space for core broad-based assets is further opening.

By grasping the recovery of market sentiment and the benefits of economic rebound, investors can focus on the core broad-based allocation tools under E Fund: CSI 300 ETF E Fund (510310) and CSI A500 ETF E Fund (159361), which provide one-click coverage of different core asset styles, suitable for current market allocation needs.