The Chinese stock market showed a strong upward trend on July 21, following a successful rebound the previous day. Analysts attribute this positive movement to the market's favorable assessment of the Chinese government's commitment to support the stock market.
On this day, the Shanghai Composite Index closed up 1.80% at 3,864.57, the Shenzhen Component Index rose 4.81% to 14,264.74, and the ChiNext Index increased by 7.09% to 3,687.11.
The China Securities Regulatory Commission convened a meeting with major securities firms and asset management companies the day before. During this meeting, the regulatory body expressed its determination to make every effort to stabilize the stock market. With the government's commitment to market stabilization confirmed, the Chinese stock market began to rise from the morning session, with gains accelerating in the afternoon.
The semiconductor sector also contributed to the index's rise. Although the sector had recently experienced a sharp decline, bargain-hunting activity on this day was noted, with analysts suggesting that this represented a strong technical rebound.
Additionally, news that the United States is considering a ceasefire with Iran positively impacted the stock market.
Expectations are also building for the upcoming Politburo meeting of the Chinese Communist Party at the end of the month, where plans for additional stimulus measures for the second half of the year are anticipated. China's GDP growth rate for the second quarter was 4.3%, below expectations, increasing the need for further stimulus announcements.
Fangzheng Securities stated in a report that the long-term positive trend of the Chinese economy remains unchanged, and the valuation of the Chinese stock market is still within a reasonable range. They noted that long-term investment capital continues to flow into the market, indicating many positive aspects for the Chinese stock market.
Notable stocks included those in the semiconductor sector, with companies like Northern Huachuang and Zhengfan Technology hitting their daily price limits.
Reports emerged that Samsung Electronics is considering doubling the initial production scale at its Taylor, Texas, facility, generating optimism about the semiconductor boom. Additionally, TSMC announced an increase in its annual capital expenditure from $60 billion to $64 billion, which also served as a positive factor. Morgan Stanley projected that the semiconductor supply shortage would persist until 2028.
Stocks related to zirconia also showed strength, with Dongfang Zirconium and Guocera Materials reaching their daily price limits.
Guocera Materials announced on the night of July 20 that it would raise the price of zirconia powder by 40%. Zirconia is used as a raw material for MLCCs (multi-layer ceramic capacitors), and the ongoing boom in MLCCs has led to an increase in the price of this raw material.
Meanwhile, the People's Bank of China set the yuan's central parity rate against the dollar at 6.7917 yuan on July 21, a decrease of 0.0031 yuan from the previous trading day, reflecting a 0.046% increase in the value of the yuan.
* This article has been translated by AI.
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