China’s stock market showed a tale of two narratives at the midday break on Jan. 30: the broad market sagged while a handful of tech and AI-related names rallied hard. The Shanghai Composite briefly recovered the 4,100 level but closed the half-day down 1.19%; the Shenzhen Component lost 0.96%, even as the ChiNext (China’s tech-growth board) staged a V-shaped rebound to finish up 0.8% after an earlier drop of more than 1%. Total turnover on the two exchanges was 1.93 trillion yuan, about 83.6 billion yuan lower than the previous session, while more than 3,800 stocks traded down — a sign of very uneven internals.
The strongest pockets of buying clustered around compute-hardware and AI-application plays. Names tied to data‑centre capacity and optical networks surged: Tianfu Communication jumped more than 10% and Yangtze Optical Fibre & Cable (Changfei) hit the daily limit-up, both reaching record highs in intraday trade. On the AI-application front, electroacoustic and media stocks also saw dramatic intraday gains, with several companies hitting limit-up levels and a number of small-cap techs enjoying concentrated flows.
At the same time, commodity-linked sectors were under heavy pressure. The non‑ferrous metals complex plunged, with precious-metals names leading the decline and multiple stocks hitting limit-down. Lithium and other battery-material counters also fell sharply, including several firms that closed at the daily down limit. The market’s bifurcation — speculative strength in a few tech pocket versus broad weakness across resource and industrial names — was unmistakable.
Several factors help explain the divergence. Investors are rotating tactically into themes tied to the secular build-out of computing capacity and AI deployment, chasing shares that stand to benefit from greater datacentre demand, networking upgrades and local AI application rollouts. Those flows are amplified in China’s market structure, where retail-driven momentum and the daily limit system can produce rapid, concentrated moves in small- and mid-cap stocks even when headline indices are weak.
But the narrowness of the advance and the drop in turnover are cautionary. With most stocks in retreat, the ChiNext rebound looks more like a sector-specific relief rally than a broad-based risk-on shift. Lower liquidity and the prevalence of limit-up/limit-down moves suggest short-term traders remain the marginal driver of price action, leaving the rally vulnerable to profit‑taking or negative macro cues.
Going forward, two dynamics will determine whether the market’s current pattern persists. First, whether domestic and global demand for compute hardware and AI services translates into durable earnings upgrades and capital expenditure cycles that justify higher valuations. Second, whether the commodity slump stabilises; extended weakness there would continue to drag on a swath of China’s resource- and manufacturing-linked equities. Policymakers’ liquidity stance and any fresh guidance on industrial support or AI-related incentives will also shape the next phase of market rotation.