The tech-heavy Star Market 50 Index, which features major chip manufacturing companies on the Shanghai Stock Exchange, closed the week up by 6.6 per cent. This partial recovery followed a 26 per cent slump in July , its steepest monthly decline on record. That revived enthusiasm could help restore investor sentiment on Chinese tech stocks, given the recent close correlation between the two markets. “Chinese stocks are now entering the stage of rebuilding confidence after the overheating risk was largely defused,” said Song Yiwei, an analyst at Bohai Securities. The rout in Chinese tech stocks followed a more than 60 per cent surge in the Star Market 50 this year, while leveraged traders pushed bets to record highs to maximise exposure to AI plays.