The Three Major Indices Bottom Out and Rebound, All Turning Positive! Micro-Cap Stocks Still Suffer Heavy Losses, What Will Happen Next Amid the 20-80 Divergence [Stock Market Review]

Market bottomed out and rebounded, closing in the green with slight gains for the three major indices. The performance of large and small indices diverged, with the micro-cap index falling over 4%. The total trading volume of the Shanghai and Shenzhen markets was 145 billion yuan, a decrease of 100.1 billion yuan from the previous trading day. On the futures market, market hotspots were rather mixed, with more stocks declining than rising, over 3,800 stocks across the market fell. In terms of sectors, cyclical stocks such as non-ferrous metals were active, with North Copper hitting the daily limit. Tourism stocks strengthened, with Emeishan A reaching the daily limit. Deep-sea technology concept stocks bottomed out and rebounded, with multiple stocks including Asia Star Anchor Chain hitting the daily limit. On the downside, computing power concept stocks weakened, with Jinji Co. falling over 10%. At the close, the Shanghai Composite Index rose 0.15%, the Shenzhen Component Index rose 0.07%, and the ChiNext Index rose 0.01%. Sectors: Tourism stocks were active against the trend, with Zhangjiajie, Emeishan A, Dalian Shengya, Tianfu Culture & Tourism, and other stocks hitting the daily limit. Changbaishan, Xiangyuan Culture & Tourism, Xi'an Tourism, and other stocks followed suit. News-wise, several online travel platforms recently released trends for the Qingming holiday. Reports indicated that as temperatures rose across the country, the bright spring weather boosted travel enthusiasm, with the main focus of the Qingming mini-holiday being traditional rituals, flower viewing, and "spring-limited" activities. AVIC Securities believes that government policy support and increased consumer vitality are expected to further boost the tourism market in spring and summer. In 2025, China's tourism industry is showing high-quality development, with tourist demand shifting from traditional sightseeing to immersive experiences and personalized exploration. Reverse tourism, small group free tours, and characteristic small cities have become new trends. Deep integration of technology drives industrial upgrading, with digital technology empowering the entire "food, accommodation, transportation, tourism, shopping, and entertainment" chain, and the application of smart scenic area management systems significantly enhancing tourist experience and operational efficiency. Cyclical stocks such as non-ferrous metals were active, with North Copper and Electric Alloy hitting the daily limit, Xinweiling rising over 17%, and Anning Shares, Jiangxi Copper Corporation (JCC), Jiaozuo Wanfang, Yechiu, and other stocks leading the gains. News-wise, international copper prices have been continuously rising, with COMEX copper futures prices reaching a new high for the year on March 20, at $5.1490/lb. At the same time, London Metal Exchange copper prices hit $10,046.5/mt, the highest since October 2024. From a market perspective, compared to repeatedly hyped tech stocks like AI and robotics, cyclical stocks are generally at lower levels and have relatively independent reasons for their rise, fitting the current preference for switching from high to low. Cyclical stocks are still expected to be active as transitional themes in subsequent sessions. Deep-sea technology stocks strengthened again in the afternoon, with Shaoyang Hydraulic, Dalian Heavy Industry, Zhenhua Heavy Industries, Youfu Co., and Asia Star Anchor Chain hitting the daily limit. News-wise, multiple provinces and cities, including Shanghai, Guangdong, Qingdao, and Zhangzhou, are promoting marine economic development. Additionally, Yantai held a press conference, aiming for a marine GDP of over 300 billion yuan by 2025. From a market perspective, deep-sea technology stocks experienced some divergence in the morning but quickly regained momentum in the afternoon, resonating to some extent with the indices. The short-term status of this theme may further improve. It is expected that recent active short-term funds will continue to focus on deep-sea technology concepts, with opportunities for extended sub-sector plays beyond the front-line core stocks. Individual stocks: From an individual stock perspective, the market's loss effect increased today. Some popular high-standard stocks in robotics and computing power continued to weaken, with Xiangyang Bearing, Yuhuan CNC, Qijing Machinery, Ningbo Dongli, Dawei Technology, and Zhejiang University Network New all hitting the daily limit. The successive decline of high-profile themes led to a reduction in overall risk appetite. Additionally, three stocks, Lianchuang, Langyuan, and Xiangxue Pharmaceutical, were designated as ST over the weekend, negatively impacting pure thematic speculation, resulting in a collective plunge of micro-cap stocks. However, during today's session, there were still signs of emotional activity in the short term, with Xuelong Group and Ocean King both completing a floor-to-ceiling move. The deep-sea technology sector also maintained high activity, although the high-standard Shenkai Co. faced negative feedback, mid-tier stocks such as Dalian Heavy Industry, Shaoyang Hydraulic, Zhenhua Heavy Industries, and Asia Star Anchor Chain all achieved consecutive daily limits. Therefore, the deep-sea technology concept may become the emotional carrier for short-term speculation and remain active in the future. Outlook: Today's market bottomed out and rebounded, with all three major indices successfully turning red at the close, reflecting that after a period of continuous consolidation, the market still has some underlying momentum, and market sentiment has not completely dissipated. However, based solely on today's end-of-day rebound, it is still uncertain whether the market has stabilized. To truly break out of the weak consolidation structure, the indices need to confirm by standing above the 5-day moving average with volume. Additionally, from the direction of today's end-of-day capital inflow, larger blue-chip stocks showed more significant recovery, while smaller-cap stocks had limited rebound, with the micro-cap index still falling over 4%. This may indicate a shift in market style, and with the approaching annual report season, weighty blue-chips with higher earnings certainty are likely to be favored by investors. Short-term sentiment further weakened, with the sentiment indicator oscillating downward into the doldrums throughout the day. Market Highlights: 1. Ministry of Finance: Support for Comprehensive Expansion of Domestic Demand, Vigorously Boosting Consumption On March 24, the Ministry of Finance released the 2024 China Fiscal Policy Implementation Report. The report proposed that in 2025, fiscal policy should be more proactive, supporting comprehensive expansion of domestic demand. Efforts will be made to vigorously boost consumption, increase people's livelihood protection, and diversify channels to increase residents' income. Implement a special action plan to boost consumption, increase support for trade-in programs for consumer goods. Appropriately raise the basic pension for retirees, and increase the fiscal subsidy standards for basic pensions and basic medical insurance for urban and rural residents. Promote the national comprehensive freight hub chain strengthening and upgrading actions, and the digital transformation and upgrading of road and waterway transportation infrastructure, to reduce the overall logistics costs. Actively expand effective investment. Coordinate the use of various government investment funds, focusing on key areas and weak links. Reasonably arrange the issuance of government bonds, accelerate the budget allocation of government bond funds, and form physical workloads as soon as possible. 2. Ministry of Human Resources and Social Security: Include Small Business Owners, Individual Entrepreneurs, and Others in the Special Loan Program for Job Stabilization and Expansion, with a Maximum Credit Line of 10 Million Yuan for Individuals On March 24, the Ministry of Human Resources and Social Security issued a notice to further increase financial support for job stabilization and expansion. In addition to small and micro-enterprises, small business owners and individual entrepreneurs will be included in the special loan program for job stabilization and expansion. The credit line for small and micro-enterprises will be increased from 30 million yuan to 50 million yuan, and the maximum credit line for individuals will be 10 million yuan.