- China's A-share major stock indices experienced fluctuations and adjustments throughout Wednesday, with the Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index all closing lower. Approximately 3,800 stocks across the two markets declined, indicating a significant increase in profit-taking pressure at high levels.
- The STAR Market 50 Index rose against the trend, driven by AI computing power and semiconductor sectors, achieving a three-day consecutive rise, reflecting a clear structural divergence within growth stocks.
- The total trading volume of the Shanghai and Shenzhen markets expanded to 2.58 trillion yuan, with high-tech themes being locally active. However, the overall market showed signs of portfolio adjustments ahead of important industry meetings.
Overall Pressure and Profit-Taking in the Equity Market
On Wednesday, the three major indices of the A-share market weakened throughout the day. The Shanghai Composite Index fell by 0.49% to 3,970.88 points, the Shenzhen Component Index dropped by 1.87%, losing the 15,000-point mark, and the ChiNext Index declined by 1.70%. Approximately 3,800 stocks closed lower, indicating strong phase profit-taking and portfolio adjustment pressure after continuous previous gains. The trading volume of the two markets further expanded to 2.58 trillion yuan, with a noticeable reallocation of funds between blue-chip and growth stocks, leading to a short-term convergence in overall risk appetite.
Structural Divergence Within the STAR Market Growth Sector
The STAR Market 50 Index performed independently, rising against the trend by 0.73% to close at 2,016.23 points, marking a three-day consecutive increase. Although its gains at the close were slightly lower than the intraday high, the trend of funds gathering towards hard technology assets remains clear. This trend highlights the sharp divergence within growth stocks, with bullish funds accelerating their exit from traditional growth tracks to pursue core computing power assets and micro-mainlines supported by both policy and technology cycles.
Computing Power and Cloud Computing Concepts Surge Against the Trend
Driven by the upcoming 2026 World Artificial Intelligence Conference and the anticipated unveiling of new Huawei products, the AI computing power and cloud computing sectors experienced a surge. Stocks like GRG Banking and Ronglian Technology hit the daily limit, while Sangfor Technologies and Wangsu Science & Technology saw single-day gains of 20%. The concentrated inflow of bullish funds into these high-prosperity sub-sectors indicates a continued warming of market expectations for the recovery of the technology cycle and the construction of domestic computing power infrastructure, with valuation re-evaluation deepening locally.
Outflow of Funds from Cyclical and Growth Sectors
While thematic stocks were active, cyclical and some growth tracks led the declines. Sectors such as energy metals, batteries, robotics, and non-ferrous metals were the overall leaders in the decline, with clear signs of funds flowing out after previous substantial profits. In contrast, sectors like oil and gas exploration and services, as well as tourism and hotels, showed relative resilience due to event-driven and defensive attributes. This significant rotation between sectors reflects a re-anchoring of risk premiums for assets with different valuation systems by market participants during a macro data lull.
