How will the market play out in April? Brokerage strategy: the concept of technology may still be the main line of the market

On the last trading day of March, the market first fell and then rose, and the 5G communication sector led the market out of a unilateral upward trend, and the two cities maintained a shrinkage and rebound pattern.

Looking forward to April, the agency believes that the market is expected to continue to be dominated by volatile and structural markets in April. It is recommended to focus on industries with obvious price increases such as panels, memory chips, and gold, and at the same time, you can also pay attention to the direction of AI optical modules, computing power, and servers (after the callback stabilizes) with large industrial demand.

The three major indexes ended in the red in March

A-shares ended in the red in March, and as of today's close, the three major indexes all closed slightly higher.

Looking back at the trend of the A-share market in March, the Shanghai Composite Index rose for 11 of the 21 trading days of this month, and the overall increase was 0.86% during the period.

The Shenzhen Component Index rose for 12 days, with an overall rise of 0.75% during the period;

The GEM index rose 0.62% as a whole during the period.

According to Wind data, in terms of sectors, electric vehicles (up 21.3% monthly), gold (up 21.17% monthly), and Xiaomi Auto (up 17.98% monthly) were among the top gainers this month, while display panels (down 10.03% this month), semiconductor silicon wafers (down 8.51% month), and high transmission (down 8.15% this month) were among the top decliners.

In terms of individual stocks, after excluding the new stocks listed this month, Gebijia (monthly increase of 355%), Jindun shares (monthly increase of 200%), and Aiai Seiko (monthly increase of 188%) were among the top gainers;

The top three decliners were Xinhai (monthly decline of 72%), *ST Mall (monthly decline of 56%), and delisting of Poten (monthly decline of 50%).

In terms of funds, in the trading day in March, northbound funds accumulated a net purchase of 21.985 billion yuan, including a net inflow of 20.139 billion yuan in Shanghai-Hong Kong Stock Connect and a net inflow of 1.845 billion yuan in Shenzhen-Hong Kong Stock Connect.

The index may fluctuate repeatedly in April

Fu Jingtao, chief analyst of Shenwan Hongyuan Research A-share strategy, said that on the whole, the performance growth of A-shares in 2024 still needs to be polished, and the A-share market in the first three quarters of this year is generally volatile. However, April is the performance verification period, the direction of continuous improvement of the economy is scarce, and the market can wait for the flexibility of policy stimulus and the clarity of the trend of the new economy industry after a normal break.

Qiu Yu, an investment consultant at Guojin Securities, believes that after the index bottomed out in February, it generally rose and fell in March. Recently, it has entered the stage of double bottoming at the weekly level, and the index may fluctuate repeatedly. Indices may compete around 3,000 points, but the sector may accelerate rotation, focusing on low-valuation defensive sectors in early April.

Galaxy Securities believes that after a round of repair and rising market, the market in April is expected to continue to be dominated by volatile and structural markets, and pay more attention to the fundamentals and policies of the sector and the company.

Great Wall Securities also said that the slope of terminal demand recovery in April may be low, and even if the monetary policy introduces a new policy of interest rate cut and RRR reduction, it will take a certain amount of time to ferment, and A-shares in April and even in the second quarter are mainly shocked.

Which sectors to watch

In terms of investment strategy, Fu Jingtao is most optimistic about the high-dividend sector. He believes that high dividends are not only defensive, but also offensive, and the market's understanding of the connotation of high dividend investment is far from sufficient. High-dividend investment is a trend of thought, the center of aggregate economic growth is downward, the difficulty of continuous argumentation increases, and the market is more cautious about the extrapolation of high growth in the new economy. In this case, the weight of the impact of growth on valuation decreases, and the weight of the impact of factors such as dividend ratio, discount rate, performance visibility, and business model stability, which already have an impact on valuation, increases.

"In April, in the case of limited fundamental elasticity of demand, supply, going overseas and technological innovation, the direction of fundamental improvement and sustainability is relatively scarce, and it is the direction to find opportunities for valuation revaluation from steady-state high dividends and dynamic high dividends. At the same time, during the April performance period, the increase in the dividend ratio may usher in a centralized verification period, which will strengthen the trend of high dividends, and the aggressiveness of high dividends may be enhanced. Fu Jingtao said.

Guosheng Securities believes that as April approaches, the annual report and the first quarterly report are about to usher in intensive disclosure, and the market rising logic may be driven by sentiment to fundamentals, and profit expectations have become one of the important factors affecting stock prices. At this stage, the direction of excellent performance in the first quarter is relatively more likely to be favored by funds. It is recommended to focus on industries with obvious price increases such as panels, memory chips, and gold in April, and at the same time, we can also pay attention to the direction of AI optical modules, computing power, and servers (after the callback stabilizes) in the industry. However, it should be reminded that the recent low-altitude economic concept is very strong, and the future of the low-altitude economy is indeed a "sea of stars", but it is still in the "poetry and distance".

"Technology concepts are likely to remain the main thread of the market, such as AI and new quality productivity concepts. Galaxy Securities said that at the end of March, it began to enter the annual report and a quarterly report disclosure period, with the development of the annual report and a quarterly report disclosure of listed companies, the industry's prosperity expectations, the company's growth expectations will be the key to the relative performance of the plates, and the plate leader is expected to gradually become the main line of market investment. The investment strategy allocated in April should focus on low-valuation value stocks + growth value stocks in sectors that benefit from performance expectations + favorable policy expectations. In April, we recommend a strategic allocation of value stocks in sectors such as technology, upstream raw materials, and consumption.