March 2, 2026 (InvestinChina.asia) – While global markets reel from the escalating U.S.-Iran conflict, China’s A-share market is charting a course of its own, demonstrating remarkable resilience amid the geopolitical storm. The focus is rapidly shifting from external shocks to the imminent “Two Sessions” (National People’s Congress and Chinese People’s Political Consultative Conference), which is expected to inject fresh policy momentum into the market.
Market Resilience Amid Global Chaos
Despite a volatile global backdrop, China’s A-shares have shown significant internal strength. On March 2, the Shanghai Composite Index defied the global risk-off sentiment, closing up 0.47% at 4,182.59 points, while the Shenzhen Component Index edged down slightly by 0.20% . This performance underscores the market’s “decoupled” nature, with domestic policy expectations and economic fundamentals outweighing external geopolitical fears.
The market structure has been starkly divided. While global events triggered a surge in safe-haven assets, leading to a collective surge in China’s “Big Three” oil giants (PetroChina, Sinopec, CNOOC) and gold stocks, the broader market remained relatively stable . This selective strength highlights the market’s focus on domestic catalysts rather than global panic.
“Two Sessions”: The Real Catalyst
All eyes are now on the upcoming “Two Sessions,” scheduled to begin on March 4 and 5. This year’s meetings are particularly significant as they mark the start of China’s 15th Five-Year Plan (2026-2030), setting the strategic direction for the next half-decade .
Analysts expect the policy focus to center on “New Quality Productive Forces” – a term encompassing high-tech sectors like artificial intelligence (AI), semiconductors, commercial aerospace, and advanced manufacturing. The government is also anticipated to roll out detailed measures to “Expand Domestic Demand”, potentially including new rounds of consumer subsidies and industrial upgrades .
Historically, A-shares have exhibited a “pre-meeting rise, intra-meeting consolidation, and post-meeting rebound” pattern during the Two Sessions period. With the 15th Five-Year Plan providing a long-term growth roadmap, market sentiment is expected to remain buoyant, with structural opportunities in policy-favored sectors .
Sector Spotlight: Where the Money Is Flowing
The market’s resilience is not uniform; it’s a story of selective strength. Capital is flowing into three key areas:
- Policy-Driven Tech (New Quality Productive Forces): AI hardware, semiconductors, and robotics are expected to be the darlings of the Two Sessions. With the government pushing for technological self-reliance, these sectors are poised for sustained policy support .
- Defensive Plays & Resources: The ongoing geopolitical tensions have bolstered sectors like oil & gas, gold, and defense. While these are reactive plays, they provide a hedge against global uncertainty .
- High-Dividend Stocks: In a volatile environment, high-dividend stocks (often state-owned enterprises in sectors like banking and utilities) are attracting investors seeking stable returns and lower volatility .
Outlook: Stability Over Speculation
While the U.S.-Iran conflict may cause short-term jitters, the consensus among Chinese analysts is that its impact on A-shares will be transient. The market’s trajectory is increasingly dictated by domestic factors – namely, the strength of the economic recovery and the clarity of policy direction from Beijing .
As one strategist noted, the market is currently in the “third stage of the Spring Festival rally,” characterized by a renewed upward momentum driven by policy expectations rather than external shocks . For global investors, the message is clear: look past the Middle East headlines and focus on the policy signals emanating from Beijing’s Great Hall of the People.
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