Global Market: Chinese tech stocks rebound as semiconductor rally lifts mainland markets

Chinese technology stocks swung sharply between losses and gains on Tuesday, helping push mainland benchmark indices higher as semiconductor shares staged a strong recovery from early declines. Investors also shifted their focus to an upcoming meeting of China‘s top policymakers expected later this month, while monitoring signs of additional economic support, according to Reuters.

The benchmark Shanghai Composite Index was up 0.6% by the midday break, while the blue-chip CSI 300 Index gained 1.8%. Technology-focused indexes outperformed after a volatile start to trading, with the STAR50 Index surging 7% after initially falling more than 3%. The CHINEXT Composite Index also advanced 3.7% following sharp early fluctuations.

Semiconductor stocks led the rebound, with the sector’s sub-index climbing 8.9% after suffering steep losses earlier in the session. The recovery helped revive investor sentiment across China’s broader technology sector.

According to Reuters, UBS Securities expects technology and artificial intelligence-related stocks to remain key investment themes during the second half of 2026 despite some unwinding of crowded positions. The brokerage also expects the sector to continue delivering solid earnings growth, supported by rapid advances in AI globally and sustained policy backing from Beijing.

Investor confidence also received a boost after China’s securities regulator pledged to maintain stable market operations. The regulator’s chief chaired a meeting with investors on Monday and committed to making every effort to ensure market stability following a sharp sell-off over the past two weeks.

In Hong Kong, technology stocks listed on the Hang Seng Tech Index rose 1.8%, although the broader Hang Seng Index traded largely unchanged.
Market participants are now turning their attention to the Communist Party‘s Politburo meeting, widely expected toward the end of July. The gathering is expected to outline China’s economic policy priorities for the second half of the year, with investors looking for further stimulus measures to support growth.According to Reuters, Goldman Sachs believes the current economic backdrop bears similarities to conditions seen in mid-2024, when slowing growth, weaker consumption and investment, equity market underperformance, and pressure on local government finances eventually prompted stronger policy support.

The investment bank expects the upcoming Politburo meeting to signal a more accommodative policy stance, with authorities likely to accelerate the deployment of existing fiscal resources as they seek to stabilize growth and restore market confidence.