China stocks rise as chip shares rebound; focus turns to Politburo meeting

SHANGHAI: Chinese technology shares staged a roller-coaster ride on Tuesday morning, helping lift key benchmark indexes as semiconductor stocks rebounded sharply from earlier losses.  

The benchmark Shanghai Composite index was up 0.6% by the midday break, while the blue-chip CSI 300 index rose 1.8%.

The tech-focused STAR50 index bounced 7% after falling more than 3%, and the start-up board CHINEXT composite index gained 3.7% following early volatility. Semiconductor shares recovered from earlier plummets, with the sub-index rebounding 8.9%.

“We believe the tech sector and AI trades will remain the main investment themes in the second half of 2026, despite crowded tech trades unwinding somewhat,” said Lei Meng, China equity strategist at UBS Securities.

The tech sector was expected to remain robust earnings growth on the back of rapid AI advances globally and China’s strong policy support, Meng said. China’s securities regulator chief chaired a meeting with investors on Monday and vowed to make “all efforts” to maintain stable market operations, after a rout over the past two weeks roiled the stock market.

Meanwhile, Hong Kong-listed tech shares rose 1.8%, while the benchmark Hang Seng index was largely flat.

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Investors are shifting their attention to an upcoming meeting of the Communist Party’s Politburo, the country’s top decision-making body, expected around the end of July.

Policymakers are expected to set the economic policy agenda for the second half of the year.

“The current setup resembles mid-2024 in some respects, before a major easing package, with slowing growth momentum, weaker consumption and investment, equity market underperformance, and local government financing strains leading to more aggressive tax collections,” said Hui Shan, chief China economist at Goldman Sachs.

“We expect the July Politburo meeting to deliver stronger easing rhetoric. For now, the likely path is accelerated disbursement of existing fiscal resources.”