China's Nasdaq-style index of tech stocks is on a tear in 2023

China’s small-cap growth shares are leading gains in onshore markets as Beijing’s push for self-reliance boosts optimism around home-grown tech names. 

The tech-heavy Star 50 Index has rallied 19% this year, beating the 5.8% advance in the benchmark CSI 300 Index and the 7.2% rise in the broader Shanghai Composite Index.

Turnover for the Nasdaq-style Star board exceeded 11% of the total value of Chinese stocks’ traded on Thursday, the second-highest since the board’s 2019 debut. It accounted for about a third of the Shanghai Stock Exch–ange’s total, a record high. 

The cohort has been gaining traction as China’s probe into Micron Technology spurred bets that the local semiconductor sector will benefit. Expectations that chip demand will soon bottom out have also added fillip, while burgeoning interest around artificial intelligence helped boost sentiment.