Huaxi Securities(SZ:002926) HUAXI Securities·2026-03-01 09:42Market Review - After the Spring Festival, the Wind All A Index saw a significant increase, breaking through the high point of January 26, indicating a reduction in post-holiday cautious sentiment. The financing balance returned to approximately 2.65 trillion yuan, with a net financing inflow of 77.6 billion yuan over the first three trading days after the holiday. Resource products and computing hardware sectors benefited from price increase logic, with steel, non-ferrous metals, and chemical indices rising over 7%. Since February, precious metals and crude oil prices have generally risen due to geopolitical risks and differing expectations regarding Federal Reserve policies. The US dollar index fluctuated around 97, while the offshore RMB continued its appreciation trend, recently surpassing the 6.9 mark [1][2][3]. Market Outlook - As the "Two Sessions" approach, the A-share market is characterized by stability. The escalation of overseas geopolitical conflicts may trigger short-term global risk aversion and inflation trading, with the duration of these conflicts being a key variable affecting the market. Domestically, the upcoming "Two Sessions" will focus on expanding domestic demand and new productive forces, which may become annual priorities. Historical data shows that the market tends to operate steadily during the "Two Sessions," with an increased probability of market gains following the conclusion of the sessions. Key areas of focus include the impact of geopolitical tensions in the Middle East, which may drive short-term global risk aversion and inflation expectations, benefiting sectors like crude oil and non-ferrous metals [2][3]. Focus on "14th Five-Year Plan" Direction - The A-share market will enter the "Two Sessions" period, emphasizing the direction of the "14th Five-Year Plan." Historical analysis from 2019 to 2025 indicates that the market's performance tends to decline during the "Two Sessions," likely due to some funds cashing out during the meetings. However, the performance of the Shanghai Composite Index and Wind All A Index tends to improve in the seven trading days following the sessions. Sectors highlighted during the sessions often continue to perform well throughout the year, such as the power sector after the mention of "carbon neutrality" in 2021 and the AI sector after the introduction of "AI+" in 2024. This year marks the beginning of the "14th Five-Year Plan," and the review of its draft will likely anchor mid-to-long-term industry directions [3][4]. Economic Focus for 2026 - The key tasks for economic work in 2026 include expanding domestic demand and fostering new productive forces. The economic growth target for 31 provinces is set around 5%, reflecting a pragmatic approach of "seeking progress while maintaining stability." The Central Political Bureau emphasized the continuation of a more proactive fiscal policy and moderately loose monetary policy, indicating a supportive and expansionary stance for 2026. The focus on expanding domestic demand and new productive forces is underscored by President Xi Jinping's article outlining eight key tasks, with the first two emphasizing the importance of domestic demand and innovation-driven growth [4][5]. Valuation and Risk Premium - From a valuation perspective, the latest Wind All A price-to-earnings (P/E) ratio, excluding negative values, stands at 18.58 times, which is at the 80th percentile of historical highs since 2010. However, approximately 40% of industries still have valuations below the median since 2010. The latest equity risk premium (ERP) for the CSI 300 is 5.26%, close to the median over the past decade, indicating that A-shares are relatively reasonably valued. In the medium to long term, the current "slow bull" market still has room for further development. Industry allocation should focus on sectors benefiting from inflation expectations, such as oil transportation, non-ferrous metals, and petrochemicals, as well as new productive forces supported by industrial policies, including military, computing, energy storage, and commercial aerospace [5].