Hainan Free Trade Zone Concept Surges with 22 Stocks Hitting Limit-Up

Deep News12-22 13:40

This morning, A-shares rallied across multiple sectors, with all three major indices posting gains. Market momentum was driven by three key themes:

1. **Policy-Driven Gains**: The Hainan Free Trade Zone sector and automotive supply chain outperformed. - The Hainan Free Trade Zone concept surged 9.59%, topping A-share sector gains, with all 29 constituent stocks rising—22 of which hit the daily limit-up. - The automotive supply chain strengthened, fueled by autonomous driving catalysts. On December 15, China’s Ministry of Industry and Information Technology approved the country’s first batch of L3 conditional autonomous vehicles for road tests in designated areas of Beijing and Chongqing, marking a pivotal step toward commercial adoption.

2. **Tech Sector Rebound**: Semiconductor and AI-related stocks rebounded as overseas pessimism eased. Leaders like SMIC and New Essex rose.

3. **Commodities Rally**: Spot gold and silver hit record highs.

At midday, the Shanghai Composite rose 0.64%, the Shenzhen Component gained 1.36%, and the ChiNext Index climbed 1.8%.

**Tech Sector Recovery** The tech rally spanned computing power, semiconductors, and consumer electronics. Analysts cited three drivers: - **Memory Chip Momentum**: Micron Technology’s better-than-expected earnings (Q1 FY2026 revenue up 57% YoY to $13.64B) lifted storage and semiconductor equipment stocks. Huafu Securities highlighted AI-driven demand creating a "super cycle" for memory, benefiting China’s full supply chain. - **Oracle and Broadcom Stabilization**: Rebounding shares eased concerns over AI narrative divergence. - **NVIDIA’s Valuation Appeal**: Bernstein noted NVIDIA trades at a 13% discount to the Philadelphia Semiconductor Index (SOX), with historically attractive valuation levels suggesting upside potential.

**Duty-Free Sector Boost** China Tourism Group Duty Free (CTGDF) surged to limit-up amid strong post-closure sales in Hainan. Sanya’s duty-free sales exceeded RMB 100M daily for three consecutive days post-launch (up 45–47% YoY). CTGDF’s promotions, including discounts and coupons, will run through early 2026.

**Asia-Pacific Markets Rise** Regional indices climbed: - Japan’s Nikkei 225 (+2%), SoftBank (+5%). - South Korea’s KOSPI (+1.85%), Samsung Electronics (+4%). - Hong Kong’s Hang Seng (+0.33%), Hang Seng Tech (+1.15%), with SMIC (+7%) leading gains. Xiaomi fell over 2%.

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