The A-share market experienced a rebound this week. Influenced by an improvement in market sentiment and a rise in risk appetite, major broad-based indices generally advanced. Among the primary indices, the ChiNext Index performed the strongest with a gain of 9.5%, while the SSE 50 Index showed the weakest performance, rising by 2.4%.
Currently, the valuation of the Wind All Share Index is at the 93.7th percentile compared to its levels since 2010. Sector-wise, communications, electronics, and mechanical equipment performed relatively well.
Significant events occurred this week. On the policy and meetings front, new pricing regulations for internet platforms took effect, and the Ministry of Commerce addressed restrictions on rare earth exports. The "Internet Platform Pricing Behavior Rules," jointly issued by the National Development and Reform Commission, the State Administration for Market Regulation, and the Cyberspace Administration of China, officially came into force on April 10th. At a regular press conference held on the 9th, Ministry of Commerce spokesperson He Yadong responded to questions regarding rare earth export controls. He stated that, based on consensus from Sino-US economic and trade consultations in Kuala Lumpur, relevant export control measures announced by China on October 9, 2025, would be suspended until November 10, 2026.
Regarding economic data, domestic inflation figures were released. In March, following the seasonal decline in consumer demand after the Spring Festival holiday, the Consumer Price Index (CPI) decreased by 0.7% month-on-month but increased by 1.0% year-on-year. The core CPI, which excludes food and energy prices, rose by 1.1% compared to the same period last year. Affected by factors such as rapidly rising international commodity prices and improved supply-demand dynamics in certain domestic industries, the Producer Price Index (PPI) increased by 1.0% month-on-month and 0.5% year-on-year.
Internationally, the US and Iran agreed to a two-week ceasefire, and former President Trump called for Israel to scale back its military operations in Lebanon. On the evening of the 7th, Eastern US Time, former US President Trump posted on social media, stating, "I have agreed to a pause in bombing and offensive actions against Iran for two weeks." On April 9th, local time, during an interview, former President Trump mentioned that he had asked Israeli Prime Minister Netanyahu to be "more low-key" in military actions in Lebanon to align with US diplomatic efforts aimed at reaching a ceasefire agreement with Iran.
The short-term window for a market rebound has opened. In previous reports, we have repeatedly suggested that potential inflection points for the market could arise from three directions: 1) better-than-expected corporate earnings, 2) the entry of medium to long-term funds into the market, and 3) an easing of external risk factors. Currently, there are signs of de-escalation in the Middle East conflict: the US and Iran have agreed to a two-week ceasefire, with negotiations set to take place in Pakistan. Concurrently, the VIX fear index has declined notably recently, indicating a rapid cooling of market risk aversion. Although the negotiations still carry uncertainty, the short-term rebound window is open, and the stock market is expected to trend upwards with fluctuations.
The market is likely to favor a growth style in the short term. However, US-Iran "negotiations" may not proceed smoothly, and it is anticipated that the overall market style in April may alternate between growth and defensive sectors. Regarding economic realities, the overall economy is expected to experience a moderate recovery, with economic expectations remaining relatively stable. In terms of market sentiment, the Middle East conflict could be a dominant factor influencing sentiment. The back-and-forth between "negotiations" and "conflict" may lead to significant swings in market sentiment. Overall, the market style in April is expected to rotate between growth and defensive themes.
In terms of market hotspots, sectors like optical communications performed relatively well this week. We believe this is because concerns over geopolitical risks have not yet subsided. Furthermore, ongoing trends such as energy transition and increased investment in AI continue to support the underlying narrative for related sectors. In the short term, investors can continue to focus on investment opportunities in themes like the price-increase trend and clean energy. For the medium term, it will be important to monitor whether crude oil prices remain elevated for an extended period, as this could potentially trigger concerns about "stagflation-like" conditions in the US, possibly leading to amplified volatility across major asset classes.
Risk analysis includes the potential for overseas risk disruptions to exceed expectations, the possibility that historical patterns may not hold, and a significant decline in market sentiment.