Although the drivers of the Chinese A-share market rally — small-caps, large-caps, chipmakers and, today, engineering and construction stocks — have been changing in quick succession over the past few months, the market remains solid and fairly insulated from external volatility as the ongoing economic recovery will likely sustain the bull run this year, equity pundits said.

The benchmark Shanghai Composite Index climbed 0.55 percent to close at 3263.31 points on Wednesday, while the Shenzhen Component Index shed just 0.03 percent to close at 11413.43 points. The technology-focused ChiNext in Shenzhen slid marginally.

State-owned enterprises listed in the A-share market, which are mostly heavyweights, were the major contributors to the Shanghai index rally. They reported an average daily gain of 1.95 percent. China Petroleum Engineering Corp, China Aluminum International Engineering and China XD Electric Co Ltd even touched the daily upper limit of 10 percent.

Listed engineering and construction companies reported the strongest average daily increase of 3.47 percent, followed by the average 3.46 percent rise in share prices of cement and construction material providers.

Their stronger performance can be partly attributed to the Ministry of Industry and Information Technology's announcement on Tuesday that the construction and operationalization of "new infrastructure" facilities, such as 5G and industrial internet, should be accelerated.

Recently released macroeconomic data showing more signs of economic recovery have also helped boost market confidence.

According to the data released by the National Bureau of Statistics on Wednesday, China's total retail sales of consumer goods exceeded 7.7 trillion yuan ($1.1 trillion) in the first two months of this year, up 3.5 percent year-on-year and reversing the declining trend seen since October. The added value made by industrial companies with a minimum annual sales revenue of 20 million yuan grew by 2.4 percent year-on-year.

Ding Zhenyu, senior investment consultant at Jufeng Investment Information, said the outlook on the US Federal Reserve's interest rate spike pace is a major external factor in the A-share market performance. But foreign investors have been bullish on China assets, increasing their exposure to A shares by over 150 billion yuan in the first two months, with the heavyweight blue chips attracting much of the foreign capital inflows, he said.

Analysts from China Asset Management said the A-share market has been recovering amid stronger volatility this year. Different A-share sectors have led the rise since November. But the rally drivers have been changing rapidly. The speed of this change has, in fact, set a record, beating the one set in 2012.

While agreeing that uncertainty over Fed rate hikes will affect the local market mood to some extent, observers said the absence of news flows on A-share companies' financial results is a reason for the current short-term volatility. More concrete data are needed to further consolidate the market expectations of economic recovery, they said.

Since some think that China's medium-term economic recovery is a certainty, the investment value of A shares has been quite noticeable after the previous adjustment, and this will lead to market recovery, said CAM experts.

Qiu Xiang, co-chief strategist of CITIC Securities, said the market sentiment and risk appetite will further improve as the economy-stabilizing policies introduced earlier will exert a bigger influence from now on. And more supportive policies can be anticipated as the two sessions — the annual meetings of the national legislature and the top political advisory body — ended on Monday.