Chinese onshore technology shares jumped on the first trading day following the Spring Festival holiday, underscoring reviving investor confidence despite tariff hikes from the United States, as homegrown artificial intelligence models make strides, analysts said.

The STAR 50 Index, which tracks Shanghai's sci-tech innovation board, rose 2.9 percent to close at 982.83 points on Wednesday, while the BSE 50, which tracks innovative small and medium-sized enterprises on the Beijing Stock Exchange, ended up 1.17 percent at 1070.38 points.

The rally was led by companies that have partnered with DeepSeek, a private Chinese startup that rocked the tech world recently with cost-effective AI large language models, or those that have benefited from the application of AI.

Beijing Paratera Tech Corp Ltd, a Beijing-listed provider of computing power, hit the daily price increase limit of 30 percent on Wednesday, closing at 98.16 yuan ($13.50) per share, the highest level since late October. A boom in AI capabilities would increase market demand for computing power.

Shanghai-listed Beijing Kingsoft Office Software Inc jumped 18.19 percent to 371.11 yuan as investors speculated on Kingsoft software integrating DeepSeek models.

A total of 3,429 A shares ended higher on Wednesday while 1,847 closed lower, despite the US levy of 10 percent additional tariffs on imports from China on Feb 1.

Zhang Jun, chief economist of CGS International, said: "While the US has imposed new tariffs on China, markets have paid more attention to China's advances in science and technology and culture, with greater confidence in China's future, given various events during the Spring Festival holiday, such as the DeepSeek boom. China's consumer and manufacturing sectors have promoted the globalization of supply chains at a faster pace in the past few years. Outstanding companies are capable of coping with changes in US tariffs, and markets are no longer as sensitive as before."

Wednesday's rally followed a surge in offshore Chinese tech stocks during the Spring Festival market break from Jan 28 through Tuesday, when the Hang Seng Tech Index went up 6.19 percent. During the same period, US tech giants fluctuated, with Nvidia closing at $118.65 on Tuesday, down about 20 percent from its recent high in late January.

"DeepSeek's market impact, driven by its cost efficiency and high performance, may prompt investors to reassess the technological potential of Chinese tech firms in the AI sector. This could lead to a revaluation of Chinese and US tech stocks," said a Huatai Securities report.

Meanwhile, the A-share benchmark Shanghai Composite Index fell 0.65 percent to close at 3229.49 points on Wednesday, while the CSI 300 Index dropped 0.58 percent to 3795.08 points.

Goldman Sachs said in a recent report that the indexes of MSCI China and CSI 300 are forecast to appreciate by about 20 percent from current levels by the end of 2025, with a 2025 target for the CSI 300 Index of 4600 points.

Despite a rough start to the new year, the investment bank said the intersection of an earnings-per-share growth of 7 to 10 percent, moderate potential valuation upside and low investor positioning points to an attractive risk-reward balance, underpinning its overweight recommendation for the A-share and H-share markets.

Zhang added that the A-share market is expected to fluctuate upward as the current valuation of the A-share market is close to its historical average, while China's economic fundamentals and A-share earnings will mainly depend on the direction and intensity of domestic policy efforts over the medium and long term.