Chinese equities continued their upward trajectory in the afternoon session following President Xi Jinping’s renewed focus on technological advancement and a series of statements from the central bank, reigniting optimism surrounding policy support.
The CSI 300 Index wrapped up Friday’s trading session with a 3.6% surge, bouncing back from a three-day decline, with semiconductor shares leading the charge.
A gauge tracking Chinese tech stocks listed in Hong Kong also hit a session peak, climbing over 7%. Investors breathed a sigh of relief as the market rebounded, amid calls for additional stimulus to sustain the momentum of a historic surge.
President Xi’s emphasis on prioritizing science and technology in China’s modernization efforts propelled chipmakers like Semiconductor Manufacturing International Corp. and Cambricon Technologies Corp. to a 20% surge.
The news coincided with the People’s Bank of China’s introduction of a specialized re-lending facility aimed at assisting companies in share buybacks, as well as a swap facility providing institutional investors with liquidity for stock purchases, which underscore the central bank’s commitment to the initiatives announced in late September.
Additionally, recent data released on Friday highlighted the urgency for the acceleration of stimulus measures to meet the annual growth target of 5% after China economic expansion decelerated in the third quarter.
Meanwhile, opinions are becoming more polarized regarding the advisability of pursuing the market rally at its current juncture. Li Bei, the founder of Shanghai Banxia Investment Management Center, expressed that now is an opportune moment for retail investors to enter the stock market.
This sentiment contrasts with the apprehension voiced by financial institutions such as Morgan Stanley Wealth Management, which maintains that the implemented stimulus measures fall short of revitalizing the ailing economy.
