Market analysts suggest that the room for further significant declines in A-shares is limited, with the key focus being on when the capital market stabilization mechanism will initiate substantive actions. Amid recent heightened volatility, some institutions remain optimistic about the long-term allocation value of gold, while others believe the bull market for gold may have concluded.

On March 23, the ongoing Middle East conflict continued to exert pressure on global equity markets, resulting in a "Black Monday" with sharp declines across Asia-Pacific markets. South Korea's KOSPI index dropped 6.49%, Japan's Nikkei 225 fell 3.48%, while both A-shares and Hong Kong stocks faced simultaneous downward pressure.

In the A-share market, the Shanghai Composite Index fell below the 3800-point level during the session, closing down 3.63% at 3813 points. The Shenzhen Component Index declined 3.76%, the ChiNext Index dropped 3.49%, and the STAR 50 Index decreased 4.31%. Over 5,100 stocks declined across the market, with only coal and petroleum sectors showing gains.

In Hong Kong, the Hang Seng Index fell 3.54%, the Hang Seng China Enterprises Index dropped 3.11%, and the Hang Seng Tech Index declined 3.28%.

Meanwhile, international precious metals markets experienced rare significant declines, with gold and silver prices continuing their substantial retreat. Spot gold touched a low of $4,100 per ounce, having fallen approximately 20% since the outbreak of the US-Iran-Israel conflict, erasing all gains made this year. Spot silver dropped nearly 10% at one point, retreating 45% from its peak earlier this year.

Facing the impact of geopolitical conflicts on various global assets, how should investors adjust their strategies to identify opportunities amid volatility?

"The recent adjustment in the A-share market is driven by a negative liquidity spiral triggered by external shocks," analyzed Zhang Xia, Chief Strategist at China Merchants Securities. "The space for further significant declines in A-shares is limited, with the key being to observe when the capital market stabilization mechanism will begin substantive action. After the adjustment concludes, we recommend focusing on three main directions: resource stocks, AI infrastructure, and new energy."

"Geopolitical risks remain elevated with potential for amphibious landings in the coming weeks," stated Ye Peipei, Fund Manager at China Europe Fund. "We are increasing attention on oil and gas, aluminum, and certain chemical sectors (coal chemicals) to enhance portfolio 'anti-fragility.' Additionally, this event will catalyze global electrification transformation (clean energy including wind, solar, storage, and nuclear power) in the long term, and we are optimistic about demand elasticity for energy metals. The景气 of strategic minor metals, particularly military-related minor metals, is strengthening, and price increases are expected to transmit more effectively."

Regarding Hong Kong technology stocks, which have undergone nearly five months of deep adjustment and are in undervalued territory, some capital has begun bottom-fishing. As of March 23, ETFs tracking the Hang Seng Tech Index have seen net capital inflows for multiple consecutive trading days, with approximately 47.8 billion yuan in net inflows this year, second only to the SGE Gold 9999 Index.

"During the initial phase of the US-Iran-Israel conflict, the Hang Seng Tech Index declined less than other broad-based indices, indicating the market had already priced in certain negative concerns, with lower valuations enhancing asset resilience," said Li Zhao, Head of Macro Asset Allocation Research at CICC Research Department. While short-term investment in the Hang Seng Tech Index requires risk control, he maintains relative optimism about the index's medium-term prospects.

Regarding gold's increased short-term volatility, many institutions remain positive about its long-term trajectory. Yao Yuan, Senior Investment Strategist at Amundi Asset Management Asia, believes that gold's recent volatility doesn't alter its long-term structural value, maintaining an overweight position on gold. "The US dollar is in a structural downward cycle, geopolitical risks have become normalized, and traditional stock-bond portfolio combinations are failing. Gold still has substantial upside potential as one of the few portfolio diversification tools in an increasingly risky, fragmented, and multipolar world."

However, some investors believe gold's upward logic is changing. Jiang Meijun, Chairman of Dajiang Hongliu Asset, suggests that based on reduced safe-haven demand, complex constraints facing US dollar policy, and the potential emergence of new global growth poles, gold's bull market may have concluded.

The Shanghai Composite Index fell below the 3800-point level during trading on March 23, continuing its correction after losing the 4000-point level on March 20. By the close, the index was down 3.63% at 3813.28 points, barely holding above the 3800-point mark. The Shenzhen Component Index fell 3.76% to 13345.51 points, while the ChiNext Index declined 3.49% to 3235.22 points.

Small and mid-cap stocks and STAR Market shares saw more severe adjustments, with the BSE 50 Index dropping 5.48%, the STAR 50 Index falling 4.31%, and the CSI 2000 Index declining 5.39%. Market turnover expanded to 2.44 trillion yuan, an increase of 145.3 billion yuan from the previous session, indicating heightened risk aversion amid declining prices.

Significant divergence appeared across sectors and industries. All Shenwan primary industries closed lower, with social services, beauty care, and agriculture, forestry, animal husbandry, and fishery sectors leading declines at 6.41%, 6.02%, and 5.56% respectively. The precious metals sector was dragged down by international gold price plunges, with multiple stocks including Chifeng Gold and Sichuan Gold hitting downward limits.

Sectors showing strength against the trend concentrated in energy, with the coal sector rising 0.20% against the market decline. Stocks including Yunmei Energy and Liaoning Energy hit upward price limits. Green power and space photovoltaic concepts remained active, with several stocks achieving consecutive limit-up gains. In domestic commodity futures markets, the energy and chemical sector performed strongly, with propylene rising over 12%, and multiple products including BR rubber and liquefied petroleum gas hitting upward limits.

Market consensus attributes the day's A-share adjustment primarily to declining global risk appetite driven by escalating Middle East tensions.

"The US-Iran-Israel conflict has led to the first historical closure of the Strait of Hormuz, with oil prices surging from around $60 to over $100 within an extremely short window," analyzed Wang Kaizhan, Fund Manager at Invesco Great Wall. "This reveals the greatest uncertainty in this year's macroeconomic environment. If order in the Middle East cannot be restored shortly, systematically elevated oil prices could cause the current tech-growth dominated market to quickly switch to cyclical-value styles. This event coincides with emerging credit market turbulence in the AI sector and investors voting with their feet against excessive capital expenditures by large tech companies, representing the worst possible timing for a致命打击."

"Therefore, portfolio management focus is gradually shifting toward liquidity management and systematic duration reduction for避险 purposes," Wang added. "We are adopting greater caution toward growth stocks requiring strong long-term profit support, with portfolios placing more emphasis on valuation protection and liquidity management compared to previous periods."

Regarding allocation direction, Ping An Fund recommends focusing on three main themes: technology growth sectors benefiting from policy support and industrial upgrading; high-dividend assets with stable cash flows and payout capabilities; and upstream energy and commodity sectors benefiting from elevated resource price benchmarks.

Listed funds saw precious metals-themed funds become the hardest hit area. SDIC Silver LOF fell by the 9.99% daily limit, while multiple gold-themed ETFs including Shanghai Gold ETF Jianxin and Gold ETF Huaxia declined over 9.5%. Gold stock ETFs generally fell more than 7.5%. Broad-based index funds also adjusted, with ETFs tracking the CSI 2000 and BSE 50 indices leading declines, while CSI 300-related ETFs saw relatively smaller drops.

The sharp decline in commodity ETFs like gold followed剧烈 fluctuations in precious metals markets. On March 23, gold and silver both experienced significant declines before rebounding somewhat. International spot gold fell more than 8% at one point during the day, nearly breaking through $4,100 per ounce, with monthly cumulative declines exceeding 21% and a retreat of over 20% from the historical high on January 29. Spot silver dropped nearly 10% at one point, retreating 45% from its peak. In domestic markets, Shanghai silver fell over 11% while Shanghai gold declined over 8%, with precious metals-related derivatives suffering heavy losses across the board.

Industry professionals attribute the gold price plunge to three main factors: substantial profit-taking following previous significant gains; Middle East tensions driving oil prices higher and inflation expectations, causing delayed Federal Reserve rate cut expectations or even shifted to rate hike expectations, weakening gold's appeal; and global stock market adjustments triggering liquidity紧张, prompting institutions to sell gold for capital replenishment.

"The recent market adjustment is essentially a negative liquidity spiral triggered by external shocks," analyzed Zhang Xia. "Historical review shows that gold provides neither safe-haven功能 nor protection against severe inflation during liquidity shocks. Each gold adjustment period varies in duration and magnitude, but typically exceeds 15% declines. This round has already seen over 15% decline from the peak as of March 20. In terms of decline magnitude, profit-taking pressure has been消化. Stabilization requires waiting for the liquidity shock to conclude."

"We believe the long-term investment value and logic for gold and gold stocks haven't significantly changed," stated Liu Tingyu, Fund Manager at Yongying Fund. "Short-term adjustments反而 enhance the investment value proposition for gold and gold stocks." Liu noted that US February non-farm payroll data missing expectations, unemployment rates exceeding expectations and previous values, combined with大幅上涨 oil prices elevating inflation, suggest the US may enter a stagflation cycle where gold has historically performed relatively well. "Currently, major international financial institutions including JPMorgan, Bank of America, UBS, and Deutsche Bank believe gold could break through to new highs above $6,000."

Liu also believes gold stocks' third-quarter earnings generally met expectations, with potential for continued Davis双击 in 2026. "As of March 20, calculating based on $4,600 per ounce gold price, major gold mining companies' average 2026 PE ratios range only 10-16 times, compared to historical valuation中枢 around 20 times, indicating significant valuation repair potential. Overall, gold stocks may continue demonstrating Davis双击 with both earnings and valuation increases, making their investment opportunities particularly noteworthy."

The previously stabilizing Hang Seng Tech Index has recently experienced consecutive corrections again. Wind data shows that since October 2025, the index has undergone nearly five months of deep adjustment with maximum interval drawdown reaching 28%. Current PE-TTM stands at 21.42 times, at the 22.31% historical percentile over the past five years, indicating明显 undervaluation below 75% of historical periods.

Why has the Hang Seng Tech Index remained depressed? According to Sinolink Securities research, AI narrative "old-new transition," tightening US dollar liquidity, combined with post-Chinese New Year food delivery and red packet subsidies further intensifying concerns about internet giant profitability have driven continued Hang Seng Tech corrections.

"Months before the US-Iran-Israel conflict, the Hang Seng Tech Index underperformed relative to major indices, primarily due to dual blows to its consumer and tech attributes," Li Zhao told Caijing. "China's domestic demand recovery pace has been slower than market expectations, dragging consumer attribute-related valuations. Market concerns that AI technology could disrupt traditional business models, applying US software sector decline logic to Hang Seng Tech while questioning innovation capabilities, have suppressed tech attribute valuations."

Additionally, some market views suggest that unlisted quality tech companies like ByteDance create a "blood-sucking effect" on the Hang Seng Tech Index. Li Zhao considers such effects secondary factors unlikely to affect the index's long-term trend. "Technology industry development determines asset macro-trends. Short-term capital disturbances from new company listings shouldn't negate the Hang Seng Tech Index's upward trend driven by corporate innovation capabilities and growth potential."

In corners unseen by most, "optimistic money" may have already begun positioning. Wind data shows that on March 9, southbound capital recorded single-day net purchases of 37.213 billion Hong Kong dollars,刷新 historical records. As of March 23, Hang Seng Tech-related ETFs have seen net capital inflows for multiple consecutive trading days, with cumulative net inflows exceeding 35 billion yuan since February.

Looking forward, Everbright Securities research indicates the Hang Seng Tech Index has formed quadruple bottom characteristics of "oversold valuation洼地 + capital buying against trends + AI fundamental improvement + impending buyback acceleration." Short-term sentiment disturbances have been充分释放, with sector risk-reward ratios significantly optimized, creating a golden window for medium-to-long-term strategic allocation.

"Short-term we highlight risks," reminded Li Zhao. "The US-Iran-Israel conflict has triggered global stagflation concerns with cooled Fed rate cut expectations. Equity assets typically face阶段性 pressure under such geopolitical shocks." Historical review shows markets generally require 1-2 months to消化 negative factors after such shocks, necessitating risk control for short-term Hang Seng Tech Index investment.

China Galaxy Securities suggests late March may represent an important observation window for market sentiment reversal, with potential for emotional repair after marginal reduction in lock-up pressure and充分释放 earnings risks. Huatai Securities research believes Hang Seng Tech Index trend reversal may require further waiting. Valuation and profit expectation stabilization可能需要时间, with rebounds requiring lower positioning and positive catalysts. Key catalysts include peak内卷 competition expectations, consumption expectation repairs, and major company model application progress, with verification expected from late March to early April.