Citing three sources, Reuters reported on Tuesday, China plans to allocate more than CNY1 trillion ($143 billion) as a support package to boost its domestic semiconductor industry.

Additional takeaways

"China plans to roll out a support package as soon as the first quarter of 2023, and over five years mainly as subsidies and tax credits."

"The majority of financial assistance will be used to subsidize purchases of domestic semiconductor equipment by Chinese firms."

On Monday, China’s Commerce Ministry filed a dispute with the World Trade Organization (WTO) after the US Department of Commerce introduced sanctions in early October to make it harder for China to buy or develop advanced semiconductors.

Market reaction

These headlines add to the improved market mood, with AUD/USD holding higher ground near 0.6770 while the US S&P 500 futures are up 0.10% on the day.