The shares of the first group of 25 companies listed in China's Nasdaq-like STAR market reversed course from a sharp slump on the second trading day, and gained across the board on Wednesday. 

Market analysts said that the stellar ride of STAR market mirrors the thrilling sentiment of Chinese institutional and individual investors, who gauge the strong support from China's central authorities as a loud bullhorn for buying-in. 

Chinese leadership is pinning hope on STAR to help raise funds for dozens of new and high-tech upstarts scattered in major Chinese cities - mostly in Shenzhen, Shanghai, Beijing, Hangzhou, Xi'an and Chengdu. 

STAR is managed by the Shanghai Stock Exchange. 

All 25 existing stocks edged up as of the end of the morning session on Wednesday, with most shares rebounding by 5-10 percent. Four stocks rallied more than 10 percent, led by Fuguang Technology with an impressive 25 percent gain. However, increases were milder compared to the first day of trading, when 16 out of the 25 companies saw their share prices double. 

Turnover during the morning session hit 12 billion yuan ($1.74 billion), sina.com reported. 

Wang Xinjie, chief investment strategist at the Wealth Management department of Standard Chartered, told the Global Times on Wednesday that the fluctuations at the beginning stage of trading reflects investors' frenzy for "novel things," and that valuations will gradually return to  normalcy after a couple of weeks.

"More Chinese tech upstarts will be attracted to listing at the STAR market instead of filing for IPO abroad. As a rising number of technology companies are listed in STAR, more institutional investors come and individual investors withdraw, and the market frenzy will calm down," Wang said.

He added that investing in STAR market could be risky for individual investors because some of the listed firms may take several years for them to make a profit, depending on the progress of their research findings. 

Yang Delong, chief economist at the Shenzhen-based First Seafront Fund Management Co, said that STAR market shares will correct in prices and diversify after adjustment, with only high-quality companies able to attract investors' funds. 

"As an important part of China's multi-layered capital market, the STAR market will become the cradle of China's new economy and new industry," Yang told the Global Times.