China's three major equity benchmarks opened lower on September 16 but staged a steady climb through the session, with all main indices closing firmly in positive territory. The Shanghai Composite Index settled at 3,891.60 points, up 0.71%, while the Shenzhen Component Index advanced 1.26% to close at 13,454.74 points. The ChiNext Index gained 1.96% to end at 3,311.47 points, and the STAR 50 Index surged 4.14% to 1,616.19 points. The Beijing Stock Exchange 50 Index also rose 1.15% to 1,040.29 points. Combined turnover on the Shanghai and Shenzhen exchanges reached 1.839 trillion yuan, an increase of 226.4 billion yuan from the previous trading day.
Market breadth was solidly positive, with 4,170 stocks advancing against 1,189 decliners and 205 unchanged. Limit-up moves totaled 91, while only 4 stocks hit limit-down, with advancers accounting for more than 70% of all listed shares. Sector performance was led by communication equipment, semiconductors, electronic chemicals, precious metals, non-metallic materials, and optoelectronics. Conversely, construction machinery, aquaculture, aviation and airports, insurance, baijiu, banking, shipping and ports, and automobile manufacturing lagged the most.
The core drivers behind Thursday's rally
The day's strength was concentrated along two primary investment themes: the semiconductor supply chain and computing hardware infrastructure. The Shenwan communication equipment and semiconductor indices jumped 5.18% and 4.44%, respectively, helping lift the STAR 50 gauge. On the news front, CITIC Securities research projected that heavily demanded heavily-doped silicon wafers could see further price increases in the second half of the year, with relevant manufacturers potentially raising 2027 long-term contract prices between September and October. Meanwhile, the 27th China International Optoelectronic Expo, held in Shenzhen from September 9-11, provided fresh catalysts. CICC, in a September 16 report, noted that "order locking" and "material locking" emerged as key themes at the expo, with some high-speed optical chip makers reporting order backlogs extending into 2028 and beyond, while optical module order visibility now covers 2027 and later years. Adding further tailwinds, Goldman Sachs published a report on September 7 upgrading its global optical module market size forecasts for 2026 through 2028.
On the policy front, six government ministries including the Ministry of Industry and Information Technology jointly released the "Opinions on Promoting the High-Quality Development of Historical Classic Industries" on September 7, which brings traditional specialty sectors such as brewing into the support framework. This triggered a 7.65% jump in the rice wine concept index, the top performer among concept groups that day. Despite robust overall trading activity with turnover rising by 226.4 billion yuan, banking, insurance, automobile manufacturing, and construction machinery sectors all closed lower.
Leading sector breakdown
1. Semiconductors: The entire semiconductor chain moved higher, with silicon wafers, silicon carbide, and equipment names leading the charge. Youyan Silicon hit the 20% limit-up, as did Jing Sheng Co., Ltd. Youyan New Material, Loniwa Semiconductor, and Zhongjing Technology all reached their daily limits, while SICC rose more than 11%. CITIC Securities' projection on tight heavily-doped wafer supply supported the move, with price hikes expected to extend into long-term agreements for next year.
2. Computing hardware: Co-packaged optics, optical communications, and optical fiber segments rallied sharply. Zhishang Technology and Weirgao hit 20% limit-ups, while Accelink Technologies, Yongding Co., Dongtian Microelectronics, and Changxin Bochuang also surged, with some names climbing over 14% and 12% respectively. CICC's post-expo research highlighted extended order visibility across the optical module supply chain through 2027 and beyond.
3. Rice wine: The rice wine concept index vaulted 7.65%, ranking first among all concept sectors. Kuaijishan extended its winning streak with a second consecutive limit-up, while Guyue Longshan and Jinfeng Wine also closed at limit-up. Beyond the policy tailwind, Huatai Securities argued that the industry's volume-price dynamics are poised for a structural re-rating.
Underperforming sectors and notable individual stock moves
Construction machinery suffered the day's steepest sector decline, with the Shenwan construction machinery index falling 4.17%. Sany Heavy Industry dropped 6.72%, with Liugong Machinery, Shantui Construction Machinery, and Hengli Hydraulic also trading lower. The aquaculture index declined 2.43%. Aviation and airports, insurance, baijiu, banking, shipping and ports, and automobile manufacturing indices shed 0.92%, 0.85%, 0.85%, 0.68%, 0.67%, and 0.31%, respectively, all staying within a 1% decline. In individual stock action, Guilin Tourism hit limit-down, Ankai Bus fell 7.75%, Bank of Ningbo declined 2.42%, and CATL dropped 3.44%.