A massive surge in trading volume and a tech-led rally have brought the Shanghai Composite Index within striking distance of the psychologically significant 4,000-point mark. On a day of high drama for mainland bourses, the index recorded a significant "long candle" gain, fueled by a staggering 2.43 trillion yuan in turnover. This liquidity explosion, up more than 820 billion yuan from the previous session, indicates a sudden and aggressive return of capital to the domestic equity market.
The rally was anchored by an explosion in the AI industrial chain, where investor appetite for computing power and hardware reached a fever pitch. High-profile gains in the Co-packaged Optics (CPO) sector, including record-breaking moves from industry leaders like Zhongji Innolight, underscore a growing conviction that China’s domestic tech infrastructure is entering a massive growth cycle. AI application developers and server hardware providers dominated the gainers' list, with over 100 stocks hitting their daily upward price limits.
Market breadth was exceptionally healthy, with over 5,100 stocks finishing in the green for the second consecutive session. This broad-based participation suggests that the rally is not merely a narrow flight to quality but a systemic re-rating of Chinese equities. While tech led the charge, precious metals also saw significant inflows as investors hedged against global volatility, even as traditional energy sectors faced a sharp correction following a dip in international oil prices.
The ChiNext and STAR 50 indices, which track China’s growth and tech-heavy enterprises, outperformed the broader market with gains exceeding 5% and 6% respectively. This divergence highlights a clear preference for high-growth sectors over traditional industrials. As the Shanghai Composite nears the 4,000-point threshold, the focus now shifts to whether this momentum can be sustained by institutional support or if it remains a retail-driven surge triggered by shifting global macro conditions.