China's equity market staged a modest recovery on Tuesday, with the tech‑heavy ChiNext index reversing an intraday slide to finish up 0.71%. The Shanghai Composite rose 0.18% and the Shenzhen Component added 0.09%, but breadth was weak: more than 3,400 stocks fell as turnover contracted to CNY 2.89 trillion, roughly CNY 353.2 billion below the prior session.
Market action was driven by concentrated thematic buying rather than broad investor conviction. Shares along the semiconductor supply chain climbed sharply — Hua Hong hit a record high and smaller chip packaging and integration names such as Yaxiang Jicheng (亚翔集成), Shenghui Jicheng (圣晖集成) and Huatian Technology (华天科技) moved to daily limit‑ups — while precious‑metals miners also extended rallies, with China National Gold posting a third straight limit‑up and Hunan Gold marking a second.
Other hot pockets included so‑called CPO concept stocks, where Yuanjie Technology surged more than 10% to a fresh high and Huilv Ecology closed at its daily limit, and space‑photovoltaic names such as Yujing and Saiwu Technology which continued recent streaks of gains. Ultra‑hard materials likewise attracted flows, with Yellow River Xuanfeng (黄河旋风) locking in a limit‑up. At the same time, traditional commodity and battery segments lagged: coal and battery chains were among the biggest decliners, and lithium and cell suppliers such as Tianji and Huasheng Lithium plunged more than 6%.
The pattern — a narrow advance concentrated in a handful of thematic sectors amid declining turnover and broad weakness — speaks to the current character of China’s A‑share market. Retail and momentum traders remain influential, chasing sector narratives tied to domestic policy priorities (notably chip self‑sufficiency and new energy themes), while sceptical institutional flows and macro uncertainty limit broad market participation.
For international observers, the episode is a reminder that headline index moves in China can mask fragility beneath the surface. The chip‑chain strength dovetails with Beijing’s long‑running industrial policy to onshore critical technology supply chains, but the skittish performance of battery and commodity names hints at uneven demand expectations for the cleantech and energy complex. Lower turnover raises the bar for sustained gains: rallies that are narrow and low‑volume are more vulnerable to abrupt reversals if sentiment shifts or regulators step in to curb excess speculation.