On April 2nd, A-Shares opened lower and moved downward with fluctuations throughout the day, with the three major indices collectively weakening and the market showing a trend of declining with shrunken volume. By the close, the Shanghai Composite Index fell 0.74% to 3919.29 points, the ChiNext Index dropped 2.31% to 3172.65 points, the Shenzhen Component Index declined 1.6%, and the Sci-Tech Innovation 50 Index fell 2.77%, only the Beijing Stock Exchange 50 Index was slightly red. The trading volume of the two markets decreased by 167.1 billion yuan, with the daily turnover dropping to 1.86 trillion yuan. The risk-averse sentiment of leveraged funds was prominent, and the balance of margin trading and securities lending in the Shanghai, Shenzhen and Beijing stock markets was 2.61 trillion yuan.

On the disk, there was obvious differentiation among sectors. Defensive sectors such as petroleum and petrochemicals, agriculture, forestry, animal husbandry and fishery, and coal performed prominently. Among them, the petroleum and petrochemical sector rose nearly 2%, with many stocks such as Bohui Co., Ltd. hitting the daily limit; while previously popular sectors such as computers, electronics, and media led the decline, with significant drops in sub-sectors such as AI chips and semiconductors. Individual stocks showed a pattern of more declines than rises, with 4,378 stocks closing lower, 1,052 stocks closing higher, 32 stocks hitting the daily limit, and 16 stocks hitting the daily limit down.

Analysts pointed out that the current shrinking volume decline was mainly affected by two factors: first, the approaching Qingming holiday led to increased risk-averse sentiment among funds and insufficient market absorption capacity; second, April entered the intensive disclosure period of annual reports and first-quarter reports, and high-valuation technology growth stocks faced pressure of performance verification, with funds migrating to low-valuation sectors. In the short term, A-Shares are likely to continue the shock bottoming trend. Investors need to be vigilant about the risk of performance explosions, and can pay attention to high-dividend sectors and the energy security main line.