Key News

Asian equity markets were mixed overnight on light volumes as South Korea underperformed. 

Investors clipped gains in Hong Kong's clean technology ecosystem stocks following yesterday's strong gains despite the increased European demand/Russian energy, domestic Chinese demand, and US tariff adjustments. Healthcare was a top performer for the Mainland. There were reports that Shanghai’s port is almost back to total capacity following lockdowns. Hong Kong internet stocks were mixed following yesterday's strong move in Hong Kong and the US. 

Before the US market opened, Hello Group (MOMO US) reported revenue and EPS that beat analyst expectations though the company's Q2 outlook was a touch soft. We had a second day of inflow into Mainland Chinese equities via Northbound Stock Connect. It was a quiet night from a news perspective.

The Hang Seng and Hang Seng Tech closed -0.56% and -0.05% on volume +1.13% from yesterday, 99% of the 1-year average. 224 stocks advanced while 243 closed down. Hong Kong short sale turnover increased +13.76%, 108% of the 1-year average. Small caps outperformed large caps while growth and value factors were mixed. Healthcare and discretionary were the top performers +1.25% and +0.94% while staples -1.65%, tech -1.38% and financials -0.74%. After yesterday's strong performance, the clean technology ecosystem was hit with profit-taking. Tencent was a small net sale, while Meituan and Kuiashou were small net buys from Mainland investors via Southbound Stock Connect.

Shanghai, Shenzhen, and STAR Board diverged +0.17%, -0.05%, and -0.9% on volume -6.25% from yesterday, which is 96% of the 1-year average. 1,304 stocks advanced while 3,110 stocks declined. Large caps outperformed small caps while growth and value factors were mixed. Top sectors were healthcare +1.77%, staples +1.28% and real estate +1% while tech -1.43%, utilities -1.26% and discretionary -1.25%. The clean energy ecosystem was mixed in the Mainland while liquor stocks outperformed. Today, foreign investors bought $690mm of Mainland stocks via Northbound Stock Connect. Treasury bonds rallied, CNY was off versus the US $, and copper did an anti-James Bond -0.07%.

Last Night’s Exchange Rates, Prices, & Yields

• CNY/USD 6.67 versus 6.64 yesterday
• CNY/EUR 7.12 versus 7.12 yesterday
• Yield on 10-Year Government Bond 2.76% versus 2.78% yesterday
• Yield on 10-Year China Development Bank Bond 2.98% versus 3.01% yesterday
• Copper Price -0.07% overnight