19.12.202503:06:06UTC+00China Stocks Gain on Defense, Aerospace Boost

On Friday, the Shanghai Composite Index advanced by 0.6% to approximately 3,900 points, while the Shenzhen Component Index increased by 0.8% to reach 13,155 points. This marks the third consecutive day of upward momentum for mainland Chinese markets, primarily driven by a surge in defense and aerospace stocks. This uptick is partly attributed to China's response to the proposed $11 billion US arms sale to Taiwan, which has heightened expectations for an enhancement of Beijing's military capabilities. Leading performers in the sector included Fujian Snowman, which soared by 8.9%, China Spacesat at 5.1%, China Aerospace rising by 1.3%, Addsino Co at 1.7%, and Aerospace Intelligent Manufacturing with a remarkable 14.8% increase. In addition, stocks related to technology and artificial intelligence experienced gains, with Eoptolink Technology climbing 4% and Zhongji Innolight up by 1.6%. Chinese equities mirrored the positive trajectory of Wall Street from the previous night, buoyed by cooler-than-anticipated US inflation figures, which have strengthened expectations for additional rate cuts by the Federal Reserve.