China's A-share market kicked off 2026 with a robust rally. By midday, the Shanghai Composite Index rose 1.07% to 4011.45 points, successfully returning above the psychologically important 4000-point mark; the Shenzhen Component Index and the ChiNext Index gained 1.87% and 2.15%, respectively. The market saw broad-based gains, with half-day turnover reaching 1.65 trillion yuan, a significant increase from the previous session.
Technology and finance sectors served as the dual engines driving the market:
- Semiconductor industry chain surged across the board: Stimulated by news such as Samsung Electronics' HBM4 technology receiving positive client feedback and SMIC securing substantial investment from the National Integrated Circuit Industry Investment Fund, memory chips and related ETFs performed strongly. The STAR 50 Index jumped over 4%.
- Insurance stocks led the financial sector: Insurance shares in both A-shares and Hong Kong markets rallied strongly. China Pacific Insurance and New China Life Insurance hit record highs, reflecting market optimism about the sector's growth potential amid the "deposit relocation" trend.
- Active thematic investment: The brain-computer interface concept saw a wave of limit-up gains catalyzed by news from Musk's Neuralink. Themes like innovative drugs and commercial aerospace also performed well.
Market Insight: The strong opening-day rally stems from both optimistic expectations for China's 2026 economic outlook (e.g., Goldman Sachs forecasts 4.8% GDP growth) and concentrated capital allocation towards two main themes: technological innovation (semiconductors, AI) and undervalued finance (insurance). Southbound capital net bought over HKD 5 billion in Hong Kong stocks, indicating synchronized warming sentiment between domestic and foreign investors.
Risk Note: Attention should be paid to whether the market can sustain its highs in the afternoon and the rotation among sectors. Resource sectors like oil adjusted due to oversupply expectations, highlighting internal market divergence.
This article does not constitute any investment advice. The stock market involves risks, and investment requires caution!