The Chinese stock market, which had risen the previous day, showed weakness on October 20. Analysts attribute this decline to the freezing of interest rates. The Shanghai Composite Index closed up 0.12% at 3,735.37, while the Shenzhen Component Index fell 0.14% to 11,801.29, and the ChiNext Index dropped 0.26% to 2,739.20.
China's central bank, the People's Bank of China, announced that it would keep the October Loan Prime Rate (LPR) unchanged. As a result, the one-year LPR remains at 3.00%, and the five-year LPR is at 3.50%. This marks the 17th consecutive month of no changes, with no new rate cuts expected. Analysts suggest that the lack of a rate cut is due to the relatively strong economic growth in the third quarter, which saw a GDP increase of 4.5% year-on-year, better than anticipated. While the economic situation is not as dire as expected, hopes for additional stimulus measures may be waning.
Additionally, the U.S. 10-year Treasury yield remains above 5%, and geopolitical tensions in the Middle East, along with rising international oil prices, are contributing to inflation concerns, putting pressure on the indices. Ahead of earnings reports from major U.S. tech companies, doubts are growing about whether increased investments in AI will translate into actual profits.
Guangda Securities noted, "Despite recent stock adjustments, the noticeable net buying of ETFs is a positive sign," but added that uncertainties surrounding U.S.-Iran relations, high U.S. Treasury yields, and a lack of new growth drivers in the AI sector remain burdensome, suggesting that the market is likely to experience fluctuations within a range rather than a sustained upward trend.
On this day, stocks related to robotics continued their strong performance. Companies such as Fantou Shuchuang, Changying Precision, and Ningbo Dongli hit their daily price limits. Unitree Technology surged over 6%, with a three-day increase exceeding 30%. According to a recent report by global consulting firm Frost & Sullivan, worldwide sales of humanoid robots reached 36,000 units in the first half of this year, with a market size of $540 million. All five leading companies in the global humanoid robot market by revenue are based in China.
Shares related to on-device AI chips also saw significant gains, with Hengxuan Technology and Yiyuan Tongxin reaching their daily price limits. Market research firm Counterpoint Research projects that the penetration rate of generative AI smartphones in the global smartphone market will reach 52% by 2027. Consequently, on-device AI, which processes AI tasks directly on devices, is expected to transition from a premium feature to a standard capability in high-end products. Additionally, according to market research firm Gartner, the share of AI PCs in total PC shipments is expected to surge from 15.6% in 2024 to approximately 54.7% by 2026.
Meanwhile, the People's Bank of China set the yuan's central parity rate against the dollar at 6.7200 yuan, a decrease of 0.0008 yuan from the previous day, reflecting a 0.01% increase in the value of the yuan.
* This article has been translated by AI.
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