Shanghai Composite Rebounds 0.9% as Chinese Tech and Robot Stocks Rally on SK Hynix-Fueled AI Optimism

Chinese stocks rebounded on Wednesday, snapping a two-day losing streak. Technology and robotics shares rallied alongside a wave of AI-driven buying across Asia, sparked by record earnings from South Korean chipmaker SK Hynix.

The Shanghai Composite index closed up 33.17 points, or 0.91%, at 3,681.47. The Shenzhen Component index rose 2.02%, and the start-up-focused ChiNext index jumped 3.4%. The tech-heavy STAR50 index gained more than 2%.

More than 4,100 stocks rose across the Shanghai and Shenzhen markets. Combined turnover rose to about 1.63 trillion yuan, roughly 167.5 billion yuan more than the previous session.

Tech leads the rebound

Technology shares, which had been hit hard in recent weeks, led the recovery. By the midday break:

Robotics stocks jumped 5.2%. Chipmaking shares rose 4.5%. 5G communications stocks gained 3.8%.

Humanoid robot stocks were the day's strongest theme, with Xiangyang Bearing posting its fifth straight daily limit-up move. Robot maker Unitree Technology rose about 12% at midday, ahead of its first quarterly report since its Shanghai listing.

Optical component makers also rebounded. Zhongji Innolight rose more than 10%, and JPT gained more than 16%. Innovative drug and contract research stocks also rallied.

In Hong Kong, the Hang Seng index rose and an index of AI-related companies jumped more than 5%.

SK Hynix sparks AI revival

The rally followed blockbuster results from SK Hynix, which reported third-quarter operating profit more than seven times higher than a year earlier. The company also announced plans to return about $75 billion to shareholders.

The results "rekindled investor sentiment towards the AI-linked trade," Reuters reported. Chip stocks rallied across the region, with South Korea's KOSPI soaring 6.6% and Japan's Nikkei rising 1.1%.

National team support

Analysts also pointed to buying by state-backed funds. Richard Tang, head of Asia equity research at Julius Baer, said the so-called "national team" of state-backed funds had clearly stepped up its purchases of A-shares in recent sessions, according to Reuters.

Bloomberg News reported earlier this week that a late-session slide on Tuesday highlighted the market's reliance on such funds for support.

Liquor stocks slump

Not all sectors gained. Food and beverage stocks fell, led by liquor makers. Wuliangye, one of China's biggest baijiu producers, fell 5.7% in morning trade after reporting that third-quarter profit dropped 48%. The decline underscored weak consumer demand in China.

Other food stocks, including Guifaxiang, Anji Food and Jinhui Liquor, also fell.

AI bubble concerns linger

Wednesday's gains came after a steep correction in Chinese tech stocks. The STAR50 index of AI and semiconductor leaders had fallen about 40% from its July peak, erasing roughly $480 billion in market value, according to Reuters. China's blue-chip CSI 300 index entered a bear market last week.

The sell-off had been driven by stretched valuations, worries about AI demand and the threat of foreign restrictions on Chinese technology equipment.

On Tuesday, the Shanghai Composite fell 1.33% as more than 4,900 stocks declined.

Stimulus hopes

Weak domestic demand has fueled calls for new economic stimulus. China's central bank said this week it plans a swap facility to provide emergency liquidity to non-bank financial institutions facing large redemptions.

Investors are also watching for policy signals after a key Communist Party meeting focused on governance.

Global week ahead

Investors across Asia are bracing for the U.S. Federal Reserve's interest rate decision on Wednesday in Washington, early Thursday in Asia. Earnings from major U.S. technology companies are also due this week, and the Bank of Japan announces its policy decision on Friday.

Further evidence of strong global AI demand could support the rebound in Chinese technology shares. Some analysts caution that valuations remain high after the recent rally and correction.