Chinese investors poured a record $2.0 billion into the Star 50 ETF, the country's largest tech-focused fund, on a single day this week, according to the Kobeissi Letter, more than double the previous daily record set in December 2020. That wave of buying helped push the underlying Star 50 index, which tracks Shanghai's Sci-Tech Innovation Board of tech and chip companies, up 11 percent the next day, its biggest one-day gain in nearly two years. The rebound follows a rough stretch just last week, when a wave of forced selling wiped out roughly $37 billion in margin debt over four days as leveraged bets on chip stocks unwound, dragging the same index down sharply. The comeback has state-linked money behind it too. China's so-called National Team funds, state-backed investment vehicles that typically step in to support markets during selloffs, took in $10 billion over the last three trading sessions, the most since April 2025. Separately, at least five of China's largest insurers have pledged to increase their stock holdings, with one insurer, China Life, alone buying more than $1.5 billion of stocks and funds. Kobeissi's read is straightforward, Chinese investors keep showing up to buy dips, turning what looked like a leverage-driven crash into a fast, well-supported recovery.
Why it matters · This is the same market that cracked hard just days ago on a leverage unwind, so a record-setting, state-supported rebound this fast suggests Chinese authorities and large domestic investors are determined to keep AI and tech stocks propped up, a dynamic global investors watching China's chip and tech sector will want to track.
Worth asking · Is this rebound, backed by state funds and insurers, a genuine return of demand, or just the familiar pattern where a leverage-driven crash gets offset by state-directed buying afterward?