Hong Kong’s Hopes Hinge On Trump-Xi Call & Policy Meeting Stimulus
5 Min. Read Time
Key News
Asian equities delivered mixed performance overnight on hopes that a phone call between President Trump and President Xi would take place this week.
Hong Kong outperformed, buoyed by a stronger renminbi (RMB) versus the US dollar, while South Korea was closed for the presidential election and Thailand was closed for the Queen’s birthday.
The Organization for Economic Cooperation and Development (OECD) emphasized that economic cooperation is essential for development, lowering its 2025 global GDP growth forecast to 2.9% from 3.2%. The OECD also reduced its US growth target to 1.6% from 2.2%, citing the ongoing US-induced trade war as a primary factor.
Mainland China's economic data appeared to confirm the negative impact of the trade war. The May Caixin Manufacturing Purchasing Managers’ Index (PMI) came in at 48.3, down from April’s 50.4 and below expectations of 50.7. Caixin's private survey, which focuses on smaller companies, may have underperformed the PMI released by the National Bureau of Statistics (NBS) due to the higher export exposure of the firms included in the survey. Investors may view the weak reading as a catalyst for policymakers to introduce strong stimulus measures at the upcoming Lujiazui Forum, which begins on June 18th.
Hong Kong had a strong session, with nearly four advancing stocks for every declining stock. However, trading volumes were only at 100% of the one-year average, and stronger volumes would have been preferred. Banks, internet stocks, and auto companies led gains, while underperformers were limited.
Appliance giant Midea Group fell -1.82% in Hong Kong and -3.82% in Mainland China after the Chairman commented that he was not concerned about Xiaomi entering the home appliance industry, but his remark that Midea “had no moat” may have unsettled investors.
The auto and electric vehicle (EV) sector benefited from robust May sales figures. Li Auto rose +5.82% following its first-quarter results and strong May sales. Xiaomi’s CEO announced that the company will reach profitability later this year and that the new YU7’s price will be revealed soon. After the close, the Ministry of Commerce (MoC) and several departments announced new measures to promote EV and hybrid auto sales in rural areas.
Mainland China equities also posted gains, though enthusiasm lagged behind Hong Kong. Financials led the advance, as banks, insurance, and brokerages all performed well. National Team exchange-traded fund (ETF) volumes were below average.
Looking ahead, markets are watching to see whether a Trump–Xi phone conversation can pave the way for a summit between the two leaders.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 1.5% |
| Hang Seng Tech | HSTECH Index | 1.1% |
| Hong Kong Turnover | HKTurn Index | 40.2% |
| Hong Kong Short Sale Turnover | HKSST Index | 11.8% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 14.1% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 119 |
| China (Shanghai) | SHCOMP Index | 0.4% |
| China (Shenzhen) | SZCOMP Index | 0.5% |
| China (STAR Board) | Star50 Index | 0.5% |
| Mainland Turnover | .chturn Index | 0.2% |
| Nouthbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | -0.1% |
| Japan | NKY Index | -0.1% |
| India | SENSEX Index | -0.8% |
| Indonesia | JCI Index | -0.3% |
| Malaysia | FBMKLCI Index | -0.3% |
| Pakistan | KSE100 Index | 1.4% |
| Philippines | PCOMP Index | 0.9% |
| South Korea | KOSPI Index | 0% |
| Taiwan | TWSE Index | 0.6% |
| Thailand | SET Index | -1.3% |
| Singapore | STI Index | 0.1% |
| Australia | AS51 Index | 0.6% |
| Vietnam | VNINDEX Index | 0.8% |
| Indicator | A | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 100% | 91% |
| Advancing Stocks | 369 | 3265 |
| Declining Stocks | 109 | 1636 |
| Outperforming Factors | Value, Dividend Yield, Large Caps | EPS Revisions, Momentum, Quality |
| Underperforming Factors | Growth, Buyback, Quality | Dividend Yield, Low Volatility, Value |
| Top Sectors | Financials, Tech, Healthcare | Financials, Healthcare, Materials |
| Bottom Sectors | Discretionary, Energy, Real Estate | |
| Top Subsectors | Auto, Banks, Tech Hardware | Daily Chemical, Office Supplies, Leisure Products |
| Bottom Subsectors | Steel, Electrical Equipment, Consumer Staples Distribution | Household Appliances, Construction Machinery, Steel |
| Southbound Connect Buys | CSPC Pharma, Meituan (Large), Akeso, Alibaba (Moderate) | |
| Southbound Connect Sells | Xiaomi (Large), Tencent (Moderate), Pop Mart, ZA Online (Small) |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | 1.66 |
| Communication Services | 9 | 1.22 |
| Consumer Discretionary | 28 | 1.2 |
| Consumer Staples | 13 | 0.69 |
| Energy | 7 | 1.76 |
| Financials | 23 | 2.92 |
| Health Care | 13 | 2.43 |
| Industrials | 20 | 0.95 |
| Information Technology | 10 | 2.52 |
| Materials | 10 | 1.69 |
| Real Estate | 6 | 0.64 |
| Utilities | 12 | 1.99 |
| Mainland China Listed | 404 | 0.39 |
| Communication Services | 6 | -0.13 |
| Consumer Discretionary | 31 | -0.75 |
| Consumer Staples | 24 | -0.15 |
| Energy | 13 | -0.6 |
| Financials | 64 | 1.55 |
| Health Care | 31 | 1 |
| Industrials | 64 | -0.04 |
| Information Technology | 91 | 0.19 |
| Materials | 58 | 0.46 |
| Real Estate | 6 | -0.46 |
| Utilities | 16 | -0.29 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 1.3 |
| Alibaba HK | 9988 HK Equity | 0.6 |
| JD.com HK | 9618 HK Equity | 0 |
| NetEase HK | 9999 HK Equity | 2.4 |
| Yum China HK | 9987 HK Equity | 0.2 |
| Baozun HK | 9991 HK Equity | 6.3 |
| Baidu HK | 9888 HK Equity | 0.9 |
| Autohome HK | 2518 HK Equity | -1.2 |
| Bilibili HK | 9626 HK Equity | -0.3 |
| Trip.com HK | 9961 HK Equity | 1.8 |
| EDU HK | 9901 HK Equity | -0.4 |
| Xpeng HK | 9868 HK Equity | 2.4 |
| Weibo HK | 9898 HK Equity | 1.6 |
| Li Auto HK | 2015 HK Equity | 5.8 |
| Nio Auto HK | 9866 HK Equity | 0 |
| Zhihu HK | 2390 HK Equity | 0.4 |
| KE HK | 2423 HK Equity | 0 |
| Tencent Music Entertainment HK | 1698 HK Equity | 2.9 |
| Meituan HK | 3690 HK Equity | 0.7 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA PICTURES GROUP LTD | 3.4 |
| CHINA CONSTRUCTION BANK-H | 3.5 |
| IND & COMM BK OF CHINA-H | 3 |
| CSPC PHARMACEUTICAL GROUP LT | 1.6 |
| BANK OF CHINA LTD-H | 2.7 |
| HAICHANG OCEAN PARK HOLDINGS | -13.1 |
| SENSETIME GROUP INC-CLASS B | -0.7 |
| GCL TECHNOLOGY HOLDINGS LTD | 1.3 |
| SIHUAN PHARMACEUTICAL HLDGS | 8.5 |
| CHINA PETROLEUM & CHEMICAL-H | 1.4 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| OURPALM CO LTD-A | 14.5 |
| KUNMING YUNNEI POWER CO-A | -10 |
| JIANGSU ZHONGCHAO HOLDING -A | 1.5 |
| GUANGZHOU HAIGE COMMUNICAT-A | 0.4 |
| RONGFA NUCLEAR EQUIPMENT C-A | -9.8 |
| SENSTEED HI-TECH GROUP-A | 0 |
| AGRICULTURAL BANK OF CHINA-A | 0.7 |
| CHINA MINSHENG BANKING-A | 3 |
| PALM ECO-TOWN DEVELOPMENT -A | 5.1 |
| BANK OF CHINA LTD-A | 0 |
Last Night’s Exchange Rates, Prices, & Yields
- CNY per USD 7.18 versus 7.19 Friday
- CNY per EUR 8.19 versus 8.15 Friday
- Yield on 10-Year Government Bond 1.68% versus 1.67% Friday
- Yield on 10-Year China Development Bank Bond 1.72% versus 1.72% Friday
- Copper Price +0.05%
- Steel Price -1.18%
