The Shanghai Stock Index fell more than 1%, AI computing power was active, oil, gas and coal rose, the Hang Seng Index fell nearly 2%, Tencent fell more than 6%, and Xiaomi bucked the trend and rose more than 3%.

# Dong Jing

Source: Wall Street CN

On the market, **most individual stocks declined**, with more than 4,700 stocks in the red across Shanghai, Shenzhen and Beijing markets. Turnover reached **1.31 trillion yuan** in the morning session, up over 60 billion yuan from the previous trading day. By sector, non-ferrous metals, rare earths, lithium mines and petrochemicals led the declines, while **computing hardware, oil & gas, and coal stocks strengthened against the trend**.

On March 19, Asian markets were under broad pressure. A-shares extended losses in the afternoon, Hong Kong stocks opened lower and moved down, risky assets generally weakened, while the energy chain rose against the market. The market was driven by two main logics:

1) Divergence within the AI industrial chain as it shifts from **expectation-driven** to **investment delivery**;

2) Escalating Middle East tensions boosting inflation expectations, pushing energy prices higher and suppressing risk appetite.

On analyst views:

- **Goldman Sachs** believes Tencent is entering a phase of **“investment for growth”**, with near-term profit pressure;

- **JPMorgan** notes AI Agents are driving **exponential growth in computing demand**, benefiting computing power and cloud infrastructure;

- **ING** attributes the selloff in precious metals to **cross-asset deleveraging** and rising real rates.

## Major Asset Performance

- **A-shares**: All three major indexes fell more than 1%; over 4,700 stocks lower, with expanded trading volume.

- **Hong Kong stocks**: Hang Seng Index -1.82%, Hang Seng Tech Index -1.79%, led lower by tech internet stocks.

- **Bonds**: Treasury futures rose across the board as risk aversion picked up.

- **Commodities**: Energy surged; precious metals and non-ferrous metals fell sharply.

- **FX**: Stronger USD and real rates pressured gold and related assets.

## A-shares: Computing power chain outperforms; resources vs growth split

A-share three major indexes extended losses in the afternoon:

- Shanghai Composite -1.28%

- Shenzhen Component -1.64%

- ChiNext -0.60%

The market showed a typical pattern of **weak indexes with structural divergence**.

AI computing-related sectors remained active, with CPO, optical communication, computing leasing outperforming. Drivers included:

- **Alibaba Cloud and Baidu AI Cloud raised computing prices**, confirming booming demand and tight supply;

- **AI Agents drove exponential growth in Token consumption**, making inference computing a new growth engine.

Meanwhile, non-ferrous metals, precious metals, semiconductors corrected collectively. Institutions viewed this decline as mainly driven by **cross-asset deleveraging and portfolio reallocation**, rather than fundamental deterioration.

Energy sectors strengthened amid Middle East conflict, with oil & gas and coal rising against the market. Changjiang Securities estimated that **long-term disruption in the Strait of Hormuz could significantly boost global coal demand**.

## Hong Kong stocks: Tencent drags tech; Xiaomi a bright spot

Hong Kong stocks opened lower and weakened. Heavyweight tech stocks were under pressure, with **Tencent plunging nearly 6%** as the main drag on the index.

At its earnings call, Tencent announced a **sharp increase in AI investment** and a corresponding reduction in share repurchases. Goldman Sachs noted the company has entered a **“profit for growth”** phase, cutting its 2026 net profit growth forecast from 10% to 7%.

In contrast, **Xiaomi rose more than 4%** after launching MiMo large models and announcing over **16 billion yuan in AI investment**. Goldman Sachs sees Xiaomi moving from R&D to commercialization, with its “Physical AI” positioning becoming clearer.

Overall, Hong Kong’s AI theme showed clear divergence:

- **Upstream computing & hardware**: Benefited

- **Downstream applications & platforms**: Near-term pressure

## Bonds: Risk aversion rises; treasury futures advance

Against weak equity markets, bonds were resilient. Treasury futures rose across the board:

- 30-year main contract +0.22%

- 10-year +0.10%

Drivers:

- Risk asset correction triggered safe-haven inflows

- Marginal weakening in economic expectations

- Geopolitical risks elevated uncertainty

Bonds acted as a classic **risk hedge** against equities.

## Commodities: Energy surges, metals plunge

Commodities saw extreme divergence:

- **Energy**: LPG surged over 10%; crude oil and fuel oil strengthened

- **Precious metals**: Shanghai silver plunged over 5%

- **Base metals**: Broad correction; Shanghai tin fell nearly 4%

Escalating Middle East tensions were the main driver. Attacks on Qatar’s gas facilities and Iran’s targeting of energy infrastructure stoked supply disruption fears, lifting oil & gas prices.

Precious metals fell despite geopolitical risks. ING noted this reflected **cross-asset deleveraging**, with stronger USD and real rates triggering profit-taking in gold.

## Summary

The core market contradiction has shifted from **“growth expectations” to “growth costs”**:

- The AI industry has entered a **high-investment phase**, weighing on near-term profit expectations;

- Geopolitical risks boosted energy prices, reigniting inflation concerns.

Against this backdrop, capital rotated rapidly between computing, energy and traditional risky assets, with **structural market characteristics** becoming increasingly pronounced.

## Risk Warning and Disclaimer

The market is subject to risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situations or needs of individual users. Users should consider whether any opinions, views or conclusions in this article are appropriate to their specific circumstances. Investment based on this article is at your own risk.