The Chinese stock market rebounded on October 28 after a decline the previous day, driven by strong performance in the semiconductor sector. The Shanghai Composite Index closed up 0.91% at 3,681.47, while the Shenzhen Component Index rose 2.02% to 11,473.18, and the ChiNext Index increased by 3.40% to 2,634.76.
SK Hynix reported a third-quarter operating profit that more than quadrupled compared to the same period last year, along with a significant shareholder return plan, fueling optimism about demand for AI semiconductors. This influx of buying interest in the semiconductor sector also positively impacted related industries, including computer hardware, which had previously seen corrections. Analysts noted that expectations for the global semiconductor market, combined with movements to buy stocks that had sharply declined, contributed to the market's recovery.
According to Zhongxin Jientou Securities, “The adjustment of technology stocks in the Chinese market has deepened significantly this month, influenced by overseas macroeconomic variables, liquidity pressures, and market leverage restructuring, which have weakened the preference for risk assets. However, the positive growth trend in third-quarter corporate earnings supports the fundamentals of technology stocks.”
Notable stocks included those in the semiconductor sector, with Fu Hanwei and Bi Yiwei hitting their upper price limits. News that Taiwan's TSMC and other foundry and semiconductor backend companies are planning new price increases also boosted investor sentiment. These companies are reportedly considering raising prices for CoWoS packaging services, widely used in high-performance AI processors, by 10% to 20%. The better-than-expected third-quarter results and additional shareholder returns from SK Hynix further supported the rise in the semiconductor sector. SK Hynix's positive outlook on memory semiconductor supply and demand also contributed to investor confidence.
Shares related to AI-based short drama content also saw gains, with Wenterou Konggu and Zhangyue Technology closing at their upper limits. According to data released by mobile data analytics firm QuestMobile on October 26, the monthly active users of Tencent's WeChat mini-program for short dramas surpassed 143 million in August, marking the first time it exceeded 100 million.
Meanwhile, the People's Bank of China set the yuan's central parity rate against the dollar at 6.7165 yuan, a decrease of 0.0006 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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