Chinese Stocks Rebound After Volatility; Analysts Cite Profit-Taking in AI and Semiconductors

The Chinese A-share market has been volatile recently. After the three major indices fell by more than 2% yesterday, they rebounded across the board today. Analysts suggest that yesterday's sharp decline was driven by rumors of regulatory investigations and profit-taking in the semiconductor and AI sectors, indicating that the market will enter a consolidation phase in the short term. According to Chinese media reports, on the 21st, the three major A-share indices fell by over 2%, with the Shanghai Composite Index dropping below 4,100 points, marking the largest single-day decline in two months. The total daily trading volume reached 3.5 trillion yuan (approx. NT$16 trillion), with over 4,700 stocks falling, particularly in the AI industry chain. In contrast, Asian stock markets generally surged yesterday, with the Taiwan stock market recording its fifth-largest gain at 3.37%, the Nikkei index rising over 3%, and the South Korean KOSPI index soaring over 8%. Xue Hongyan, Deputy Dean of the Star Map Financial Research Institute, analyzed that yesterday's drop was influenced by rumors of regulatory investigations into high-flying AI and semiconductor stocks to curb speculation and leveraged trading. Additionally, the STAR 50 index had reached historical highs, creating pressure for profit-taking. The three major A-share indices rose today, with the Shanghai Composite up 0.87%, the Shenzhen Component up 2.3%, and the ChiNext up 2.84%. Trading volume in Shanghai and Shenzhen was 2.9 trillion yuan, lower than the previous day, but over 3,800 stocks rose. Xue believes the sell-off provided entry opportunities for sidelined capital and that this adjustment is a correction after rapid gains, not a trend reversal. In the medium to long term, the direction of AI industrialization and growth policies remains intact.