The three major A-share indices all rose over 1%, with the pharmaceutical and biotech sector surging significantly, and over 4,400 stocks in the green.

Ask AI · The pharmaceuticals and biotech sector explodes, how can innovative drug companies seize policy dividends?

The three major A-share indices collectively opened higher on April 1. The morning session opened high with fluctuations, but trading volume did not effectively expand. After a brief surge in the afternoon, the market fluctuated and pulled back, with the gains slightly narrowing.

From the market perspective, the pharmaceuticals and biotech stocks surged, with CRO and innovative drug sectors rising sharply; the computing hardware industry chain strengthened, led by CPO and GPU sectors; AI applications, computing power leasing, semiconductors, robotics, and consumer electronics themes were active. Power and lithium mining sectors adjusted.

By the close, the Shanghai Composite Index rose 1.46%, to 3,948.55 points; the STAR 50 Index increased 3.33%, to 1,298.2 points; the Shenzhen Component Index gained 1.7%, to 13,706.52 points; the ChiNext Index rose 1.96%, to 3,247.52 points.

Wind statistics show that a total of 4,492 stocks in both markets and the Beijing Stock Exchange rose, 881 stocks fell, and 115 stocks remained unchanged.

The total trading volume of the Shanghai and Shenzhen markets was 2.01T yuan, an increase of 1.99T yuan from the previous trading day’s 20B yuan. Among them, the Shanghai market traded 897.3B yuan, up 891.9B yuan from the previous day’s 5.4B yuan; the Shenzhen market traded 1.12T yuan.

According to Great Wisdom VIP, there are 119 stocks in both markets and the Beijing Stock Exchange with gains over 9%, and 15 stocks with declines over 9%.

Pharmaceutical and biotech stocks surge significantly, oil and petrochemical sectors turn lower at the close

In terms of sectors, pharmaceuticals and biotech stocks surged sharply, with nearly 30 stocks such as Ruizhi Medicine (300149), Guangsheng Tang (300436), Aidi Pharmaceutical (688488), Yifang Biotech (688382), and Kangtuo Medical (688314) hitting the daily limit or rising over 10%. China Galaxy Securities suggests focusing on: 1. Innovative drug companies with core technology platforms, differentiated pipeline layouts, global cooperation potential, and ongoing data readout expectations, especially those likely to see positive catalysts at major academic conferences like AACR; 2. CXO/CDMO industry chain benefiting from marginal recovery in overseas R&D demand and order improvements; 3. Under policy support, accelerated achievement transformation, and ongoing domestic substitution, innovative devices and related niche fields with sustained delivery capacity.

Semiconductor sector performed notably, with Laplace (688726), Xinjian Co., Ltd. (688521), Juguang Technology (688167), Changguang Huaxin (688048), and Pairui Co. (300831) hitting the daily limit or rising over 10%, and GigaDevice (603986), Jinghe Integration (688249) rising over 6%.

Non-ferrous metals fluctuated at high levels, with Lida New Materials (603937) hitting the limit, Longci Technology (300835), Shengtun Mining (600711), Haixing Co. (603115), and Yongjie New Materials (603271) rising over 6%, and Luoyang Molybdenum (603993), Tunan Co. (300855) rising over 4%.

Power stocks declined, with the utilities sector falling against the trend, with Guangxi Energy (600310), Huitian Thermal Power (000692) hitting the limit down, and China Huaneng (600726), Zhongmin Energy (600163), and Shen Nan Electric A (000037) falling over 7%.

Agriculture, forestry, animal husbandry, and fishery sectors performed poorly, with Jingji Zhinnong (000048) hitting the limit down, and Lud Technology (688156), Andeli (605198), and Pingtan Development (000592) falling over 4%.

Oil and petrochemical sectors turned lower at the close, with Zhongman Petroleum (603619), Tongyuan Oil (300164), Beiken Energy (002828), Lanyan Holdings (000968), CNOOC (600938), and Qian Neng Hengxin (300191) falling over 2%.

Market pricing anchors are expected to gradually penetrate emotional disturbances

Galaxy Securities states that the evolution of the US-UK-Iran conflict remains highly uncertain, and its short-term suppressive impact on global risk assets is unlikely to dissipate soon. Until the conflict trend becomes clearer, combined with the global liquidity tightening environment driven by rising inflation expectations, global equity markets are likely to continue high volatility, with A-shares mainly digesting through fluctuations. However, under external uncertainties, China’s domestic advantages are prominent, strongly supporting the resilience of the A-share market. The main themes of energy security, independent controllability, and industrial upgrading are clear, with stronger defensive attributes and cost-effective allocation. As annual reports and Q1 earnings are released in bulk, sectors with high earnings certainty and continuous improvement in prosperity will become core focus areas for funds. In terms of allocation, the medium to long term remains optimistic about the technological sector driven by industry cycles and the cyclical sectors with upward pricing signals.

Guo Tao, Chief Economist at Bank of China Securities, believes that global central banks are caught in a dilemma of “steady growth” versus “controlling inflation.” “From a financial asset pricing perspective, current global asset prices mainly price in inflation shocks but overlook the impact of high energy costs on economic growth. If the market shifts toward recession trading later, bonds’ safe-haven value will become prominent, while equity assets face profit downgrades, and commodity prices will be under pressure due to demand contraction,” Guo Tao said.

Cao Liulong, Chief Strategy Analyst at Western Securities, believes that investment in the technology sector is the trend, but after a sustained rally, “conceptual narratives” alone may no longer suffice to impress investors. Investors will demand improvements in the fundamentals of tech companies and real cash flow.

“The long-term nature of conflicts will export ‘stagflation’ institutional costs globally. For asset pricing, this means the valuation models based on low interest rates, globalization, and efficiency over the past two decades are being systematically reassessed,” said Tian Lihui, Dean of the Financial Development Research Institute at Nankai University. “China’s core advantage in the current global chaos lies in providing a ‘dislocation space’ in macro cycles and a ‘certainty anchor’ at the institutional level.” Tian Lihui added that while Western major economies are caught in the dilemma of fighting inflation versus recession, China has independent monetary policy cycles and more room for fiscal maneuvering, shielding Chinese assets from the extreme constraints of the global high-interest-rate environment.

Wang Han, Chief Economist at Industrial Securities and Co-Director of the Economics and Finance Research Institute, stated that for Q2 asset allocation, strategically, A-shares should not be overly pessimistic, as there is clear support. Tactically, one must face increased market volatility and adhere to contrarian strategies. The capital market is naturally risk-averse, and A-shares are especially sensitive to this.

Huatai Securities states that looking ahead, external geopolitical variables and internal “pre-holiday effects” may pressure trading activity. However, from a cross-month perspective, as April enters the period of intensive earnings disclosures, the market’s pricing anchors are expected to gradually penetrate emotional disturbances and return to fundamentals. In terms of allocation, it is recommended to moderately focus on coal, power chain, and chemical raw materials that benefit from high oil prices and have price pass-through capabilities, and to hold low-position core necessities for consumption as the base position.