China's A-Share Three Major Indices Open Lower, Semiconductor Memory Chip Sector Leads Declines
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China's A-share market opened lower Wednesday — the Shanghai Composite fell 0.43% and ChiNext dropped 1.01%, led by selloffs in semiconductors and memory chips. Multiple brokerages see this pullback nearing its end, with first-half earnings about to test whether the growth trade can hold.
What exactly sold off this morning?
The Shanghai Composite opened down 0.43%; ChiNext fell harder at 1.01%.
The heaviest declines hit tech-hardware names: semiconductors, memory chips, telecom equipment, CPO (co-packaged optics — a design that puts optical modules directly inside network switches), and lab-grown diamonds.
This means → stocks that rallied the most on the prior tech-growth theme are now absorbing concentrated profit-taking.
Is this a trend reversal or a technical correction?
Founder Securities sees a pullback driven by profit-taking and amplified by liquidity concerns — a technical correction that "may be nearing its end."
The key supporting data point: although the Shanghai Composite faces resistance near 4,100, market-wide turnover remains above ¥3 trillion. In plain terms = selling pressure is real, but buyers are still showing up — the market has not lost its support base.
Orient Securities adds a technical read: Monday's strong rally candle broke the downtrend channel in place since May 21. The firm calls the probability of the Shanghai Composite challenging the 4,150 zone "very high."
Once the correction ends, where does the money go?
BOC International notes that as the first-half earnings window approaches, market attention will shift from thematic trading to earnings verification. This means → narratives alone won't be enough; real financial results now have to back the story up.
The firm sees the clearest earnings momentum in AI computing power and the semiconductor supply chain — rising AI adoption continues to drive infrastructure spending, with orders and capex across multiple chain segments holding at elevated levels.
In plain terms = earnings season is an exam, and computing power plus semiconductors are the sectors the market expects to post the best scores. Strong results keep the growth theme alive; a miss puts the rally's staying power in doubt.
Content is for reference only, not financial advice.