On October 28, the market rallied throughout the day, with the three major indices rebounding on higher volume. By the close, the Shanghai Composite Index gained 0.91%, the Shenzhen Component Index rose 2.02%, and the ChiNext Index jumped 3.4%.
A total of 4,156 stocks advanced, with 73 hitting the daily limit, while 1,239 declined.
Robot concept stocks collectively surged, with more than ten companies including Ningbo Dongli, Wanxiang Qianchao, Wuzhou Xinchun, and Construction Industry hitting the daily limit. Semiconductor chip stocks strengthened, with Fuhan Micro, Biyi Micro, Jinhaitong, and Yingfang Micro reaching the limit up. Computing hardware stocks rebounded, with Zhongji Innolight rising over 10%. On the downside, consumer stocks such as liquor and food declined, with Anji Food touching the limit down and Jinhui Liquor dropping over 6%. Sectors including pork, insurance, and brokerages fell against the broader market trend.
Reasons for the Rally
First, there was a rebound from oversold conditions. Second, SK hynix (SKHY) released earnings that rescued tech stocks across the entire market. SK hynix reported third-quarter results for the period ending in September, with operating profit reaching 83.3 trillion Korean won (approximately $62.5 billion), exceeding market expectations by more than 7%. The company also announced it would return an additional approximately $45 billion to shareholders. This reflects the strong momentum in artificial intelligence infrastructure construction, which continues to drive chip demand growth. SK hynix reiterated that the supply shortage of key memory components essential for Nvidia's accelerated computing chips will persist at least until 2030. Company executives stated that future investment will be significantly increased to expand capacity. With orders for traditional memory chips and high-bandwidth memory (HBM) needed for artificial intelligence already booked through 2029, the company is actively planning capacity expansion. SK hynix's confidence in the industry outlook drove broad gains across Asian stock markets. From larger rival Samsung Electronics to Japan's Kioxia Holdings, and even related semiconductor leaders in the A-share market, all saw stock prices boosted. The multi-year order backlog has strengthened investor confidence in the data center construction boom and suggests that memory chip prices may not have peaked yet. Jung In-yoon, CEO of Fibonacci Global Asset Management, said: "Investors have been questioning two issues: how long can AI demand growth actually last, and how much of the excess profits companies earn will ultimately be returned to shareholders? Today's announcements help address both concerns." SK hynix announced a new shareholder return plan: returning 60 trillion Korean won (approximately $45 billion) to shareholders through share buybacks and cash dividends during the remainder of the fiscal year. Combined with the previously announced 40 trillion Korean won shareholder return plan, the cumulative scale will reach 100 trillion Korean won.
Another Positive Development
Third, there was another positive development during the session. According to reports, institutional investors generally believe the market has become oversold, and some institutions including pension funds, insurance companies, and mutual funds have increased their buying activity.
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