China stocks rebound as tech buyers return

Fidelity China Special Situations

China’s stock market rebounded on Tuesday as investors moved back into technology shares after a recent selloff in chipmakers created buying opportunities. The recovery was supported by stronger trade data, which helped improve sentiment towards companies linked to semiconductors, computers and broader technology hardware.

The Shanghai Composite rose 1.28% to 4,010, while the Shenzhen Component gained 3.02% to 15,269. Technology shares led the advance, with semiconductor names drawing renewed interest from investors looking for exposure after recent weakness. Hong Kong stocks were little changed, showing a steadier tone compared with the stronger rebound in mainland markets.

The improved market mood followed trade figures showing that China’s exports increased 19.4% year-on-year to a record US$376.8 billion. Imports rose 27.4% to US$271.4 billion, leaving a trade surplus of US$105.4 billion, the largest since January.

Chipmakers were a clear focus. The earlier selloff had pushed parts of the sector lower, and some investors used the weakness to rebuild positions. The rebound suggests that buyers still see value in companies connected to semiconductors and advanced technology, despite ongoing uncertainty around global demand, pricing and geopolitical risk.

The trade data also reinforced the importance of technology hardware to China’s economy. Semiconductors, computers and related equipment remained important parts of the country’s trade flows. This matters for investors because companies in these areas are tied to both domestic industrial policy and global demand for computing infrastructure.

The stronger mainland performance showed that investors were willing to take on more risk after recent selling. Rather than signalling a broad change in market direction, the move appears to reflect selective buying in areas where valuations had become more attractive. Technology remains a sector where expectations can shift quickly, so timing and stock selection are important.

Fidelity China Special Situations PLC (LON:FCSS), the UK’s largest China Investment Trust, capitalises on Fidelity’s extensive, locally-based analyst team to find attractive opportunities in a market too big to ignore.

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