China's A-share indices rally, total turnover exceeds 2 trillion yuan

Chinese stock markets rallied on September 18, with major indices posting broad gains and net capital inflows exceeding 440 billion yuan, according to data from Flush.

Market Overview

All three major A-share indices closed higher:

• Shanghai Composite Index: +0.94%
• Shenzhen Component Index: +1.72%
• ChiNext Index: +2.25%
• Beijing Stock Exchange 50 Index: +1.79%
• STAR 50 Index: +2.88%

Total market turnover reached 2.0929 trillion yuan, up 256.4 billion yuan from the previous trading day. More than 4,200 individual stocks posted gains.

Sector highlights included: memory chips, semiconductors, medical services, automobiles, coal mining, and banking.

01 Memory Chip Sector Surges

The memory chip sector saw a sharp rally, with multiple stocks hitting their daily price limits.

Overnight Market Context: On September 17, U.S. stock markets closed higher:

• Nasdaq: +1.69%
• S&P 500: +1.14%
• Dow Jones: +0.61%

The "Magnificent Seven" tech stocks all rose, with Nvidia, Tesla, and Amazon gaining over 2%, while Microsoft, Apple, Meta, and Google each rose over 1%.

AI hardware and semiconductor stocks also rallied:

• Philadelphia Semiconductor Index: +3.14%
• ARM: +8%
• Intel: +7%
• SanDisk, AMD: +6%
• Micron Technology: +5%
• SK Hynix, Dell Technologies, Marvell Technology: +4%
• Seagate Technology, Qualcomm: +2%

Sumit Sadana, Senior Advisor to Micron Technology's CEO and former EVP & Chief Commercial Officer, noted that meaningful new supply additions are not expected to ramp up until 2028.

Separately, Nvidia CEO Jensen Huang, speaking at an AI summit in Scotland on Thursday, commented on the ongoing demand driven by artificial intelligence.

02 CPO Sector Shows Strong Activity

The Co-Packaged Optics (CPO) sector performed actively on Thursday.

Notable Movers:

• Ceyear Technologies: Hit the 20% daily limit
• A-Lai De, Yibo Technology, Nations Technologies: Each rose over 10%
• Gongjin Electronics, Huatian Technology: Hit the 10% daily limit

Industry Analysis: Industry insiders attribute the CPO sector's strength to three key factors:

1. Sustained AI Hardware Activity: Marvell Technology and GlobalFoundries expanded their multi-year partnership to increase silicon-germanium chip production capacity for high-speed optical connectivity, covering pluggable optical modules, near-package optics, and CPO. AI cloud provider Nebius also raised its GPU leasing capacity.

1. CPO Specification Adjustment Rumors: While rumors of CPO downgrades caused volatility in CCL and PCB stocks, the declines appeared more driven by profit-taking on long-term narratives. In the long run, CPO may shift some high-speed signal transmission to the packaging side, altering board design and value distribution, but this does not mean CCL will be simply replaced. High-end substrates and advanced packaging remain critical.

1. Huawei's Updated Computing Roadmap: Huawei updated its computing roadmap, advancing the launch of the Ascend 960DT to Q1 2027. The Peerium architecture targets larger-scale chip interconnects, signaling a shift toward coordinated breakthroughs across chips, interconnects, storage, and software.

CICC Research Note: "Locking orders" and "locking materials" were key themes at the 27th CIOE (China International Optoelectronic Exposition). Demand visibility for 2027 has further improved. Some high-speed optical chip companies have order backlogs extending to 2028 and beyond, while optical module order visibility covers 2027 and later.

03 Housing Market Shifts Toward Existing Homes

Zhang Xuetao, Director of the Real Estate Market Supervision Department at the Ministry of Housing and Urban-Rural Development, stated at a State Council Information Office press conference that China's real estate market is undergoing two major transformations:

• Supply-demand dynamics have changed significantly
• The market has entered an era of existing housing stock

Key data points:

• The share of second-hand home transactions rose from 27% in 2020 to 46% in 2025
• In the first eight months of this year, that share reached 52%
• Sales of completed (ready-to-move-in) homes have become the prevailing trend

Source: China Business News