Tech firms give A-share markets boost

Amid heightened global risk aversion due to concerns over geopolitical uncertainties and the profitability of emerging technologies, the A-share market is likely to bottom out after recent corrections, which can be largely attributed to an innovation-driven economy and the continued market stabilizing efforts, experts said.

The comments followed the benchmark Shanghai Composite Index climbing 0.89 percent and Shenzhen Component Index closing 2.79 percent higher on Friday. Technology-focused ChiNext in Shenzhen jumped 4.16 percent, shrugging off global market concerns over whether massive artificial intelligence investments can deliver returns, which resulted in Nasdaq's 2.6 percent slump on Thursday.

The bullish performance of technology companies can take much credit for the Friday A-share rally. Among the 82 companies touching the daily price increase limit, 32 have AI-related businesses, 28 are robotics companies and five are from the new energy sector, according to market tracker Wind Info.

Eric Jan, who oversees investment firm Barings' business in China, says the Chinese market is like a test field for innovations. Chinese consumers are the fastest adopters of new technologies. Meanwhile, China is capable of building a comprehensive AI ecosystem thanks to its strength in low-cost technology deployment, massive data, high-level digital economy and the deep integration between technology and the real economy.

The economic value of AI can be extended to sectors such as semiconductors, energy, data centers and manufacturing, he said.

The massive net capital inflow into broad-based exchange traded funds, which are products of mutual fund companies, have also helped to pull up the market. Ever since Sept 28, equity exchange-traded funds, or ETFs, have registered net capital inflow for 14 consecutive trading days, reaching a five-year high on Thursday by topping 46.5 billion yuan ($6.97 billion), according to Wind Info.

Yang Chao, chief strategist of China Galaxy Securities, interpreted such net inflow as structural support for the A-share market, indicating mid to long-term capital has entered the market.

Zhou Xiangyong, chairman of Guotai Asset Management, said that mutual funds, which are stock market stabilizers, should better meet investors' demand for seeking profits, especially at times of market volatility. Therefore, they should make quick adjustments to adapt to investors' risk appetite, he said.

Wang Qian, general manager of Amundi BOC Wealth Management, said that the A-share market is showing signs of bottoming out, which points to a window of opportunity for making medium to long-term plans. The lower valuation of A shares, clear policy direction and the anticipated recovery of China's economic fundamentals have formed Wang's optimistic outlook on the Chinese stock market in the mid to long-term.

Song Yu, chief China economist at UBS Securities, underlined recent positive changes, including China's better-than-expected economic growth and the marginal improvement in China-Europe trade relations. The market's judgement for future growth and policy trajectories may be adjusted accordingly, he said.

Noriko Chen, vice-chair of Capital Research and Management Company, has noticed the accelerated dividend payments of Chinese public companies, the listing of innovation-driven companies and the normalized delisting. These address the regulators' targets of building a safe, transparent, open, resilient and high-quality market, she said.

During the Annual Conference of Financial Street Forum 2026, Iqbal Khan, president of UBS Asia Pacific, applauded China's strength in turning innovation into industrial application and scale.