Shares of CMSC Holdings Ltd. (06099), a leading Chinese semiconductor company, skyrocketed by 31.72% on Thursday, October 18, 2024, as investors cheered positive economic data and market-friendly measures announced by China's central bank. The rally in CMSC's stock was part of a broader surge in Hong Kong equities, with the Hang Seng Index climbing nearly 4% and the Hang Seng Tech Index surging 6.2%.
The bullish sentiment was fueled by better-than-expected economic data from China, including a 4.6% year-over-year increase in third-quarter GDP, faster-than-anticipated growth in industrial output and retail sales, and a stronger-than-expected rise in fixed asset investment for the January-September period.
Adding to the optimism, the People's Bank of China (PBOC) announced a series of market-friendly measures, including a cut in reserve requirement ratios, a reduction in lending rates, the launch of swap facilities, and the introduction of a special re-lending program to support economic growth and market liquidity.
The semiconductor sector stood out as a top performer, with CMSC and its peer HG SEMI both skyrocketing by 31%. The surge in semiconductor stocks reflects investors' expectations of strong demand for chips as China's economy continues to recover and technology sectors thrive.
Analysts remain optimistic about the semiconductor industry's outlook, citing the government's support and the growing importance of advanced technologies like artificial intelligence and autonomous driving. "Autonomous driving will turn into a key trade in the coming three months, aided by CMSC's launch of its robotaxi next month," said Guotai Junan International analyst Li Muhua.
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