Regulatory Support For AI & Tech Raises Growth Stocks, Trump & Xi Speak
5 Min. Read Time
Key News
Asian equities were positive overnight, led by Hong Kong and South Korea, while Japan underperformed, as Trump and Xi are said to have held a phone call.
Helping sentiment was May’s Caixin Services PMI, which increased month over month to 51.1 from 50.7, beating expectations of 51.0. Hong Kong and Mainland China were led higher by growth and technology stocks following a speech from a senior official of the CSRC, China’s SEC, affirming strong support for the science and technology sector in the capital markets. This follows a similar message from the Ministry of Industry and Information Technology (MIIT) supporting AI development.
Alibaba gained +3.23% despite a Financial Times article, widely publicized by Bloomberg News, that Apple and Alibaba’s AI iPhone partnership was being held back by the China's government, according to “two people familiar with the matter”. This was a great sign of resiliency! Alibaba likely benefited from a rise in AI plays, including Kuaishou, which gained +5.01%, along with semi conductors, including Semiconductor Manufacturing International (SMIC), which gained +4.19%. Healthcare and biotech were hit with profit taking along with precious metals and home appliances.
According to a Mainland media article, a great indicator of Hong Kong’s market rebound is that $77.6 billion of capital has been raised by listings, which is 7 times the amount raised versus last year and 90% of 2024’s total.
Today, Tencent was Hong Kong’s most heavily traded stock by value in Hong Kong, with HKD 9.3 billion in total volume, which is almost 2X the average HKD 5 billion for the highest value last year. The US appears to be going the other direction on reports that the SEC will tighten scrutiny of foreign listings.
Autos, including electric vehicles (EVs) and hybrids, had a good day in both markets following strong May results, along with insurance and capital markets. Mainland China opened lower but managed to grind higher, led by technology hardware, software, and semiconductors. The Renminbi closed at 7.17 per US dollar, having rallied from 7.34 on April 9th, which was also a 52-week low. It feels like stocks are starting to play catch-up to the currency. Fingers crossed!
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 1.1% |
| Hang Seng Tech | HSTECH Index | 1.9% |
| Hong Kong Turnover | HKTurn Index | 4.4% |
| Hong Kong Short Sale Turnover | HKSST Index | 8.9% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 15.2% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | -216.1 |
| China (Shanghai) | SHCOMP Index | 0.2% |
| China (Shenzhen) | SZCOMP Index | 0.5% |
| China (STAR Board) | Star50 Index | 1% |
| Mainland Turnover | .chturn Index | 11.7% |
| Nouthbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | 0.5% |
| Japan | NKY Index | -0.5% |
| India | SENSEX Index | 0.5% |
| Indonesia | JCI Index | 0.6% |
| Malaysia | FBMKLCI Index | 0.7% |
| Pakistan | KSE100 Index | 0% |
| Philippines | PCOMP Index | 0% |
| South Korea | KOSPI Index | 1.5% |
| Taiwan | TWSE Index | 0.3% |
| Thailand | SET Index | 0.8% |
| Singapore | STI Index | 0.4% |
| Australia | AS51 Index | 0% |
| Vietnam | VNINDEX Index | -0.3% |
| Indicator | A | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 118 | 102 |
| Advancing Stocks | 269 | 2360 |
| Declining Stocks | 197 | 2589 |
| Outperforming Factors | Liquidity, Momentum, Growth | Momentum, Liquidity, Growth |
| Underperforming Factors | EPS Revisions, Dividend Yield, Quality | Low Volatility, Value, Dividend Yield |
| Top Sectors | Real Estate, Tech, Discretionary | Tech, Communication, Discretionary |
| Bottom Sectors | Materials, Staples, Healthcare | Healthcare, Energy, Materials |
| Top Subsectors | Semis, Media/Entertainment, Tech Hardware | Motorcycle, Electronic Components, Internet |
| Bottom Subsectors | Consumer Services, Household/Personal Products, Household Appliances | Daily Chemicals, Soft Drinks, Food |
| Southbound Connect Buys | Meituan (Large), Pop Mart (Small) | |
| Southbound Connect Sells | Tencent, Xiaomi (Large), Alibaba, SMIC, Smoore (Small) |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 152 | 1.11 |
| Communication Services | 9 | 0.84 |
| Consumer Discretionary | 28 | 1.94 |
| Consumer Staples | 13 | -1.3 |
| Energy | 6 | -0.19 |
| Financials | 24 | 1.18 |
| Health Care | 12 | -1.25 |
| Industrials | 21 | -0.26 |
| Information Technology | 10 | 2.05 |
| Materials | 10 | -1.32 |
| Real Estate | 7 | 2.27 |
| Utilities | 12 | 0.44 |
| Mainland China Listed | 395 | 0.42 |
| Communication Services | 7 | 0.58 |
| Consumer Discretionary | 29 | 0.25 |
| Consumer Staples | 24 | -0.07 |
| Energy | 13 | -0.23 |
| Financials | 64 | 0.18 |
| Health Care | 32 | -0.36 |
| Industrials | 61 | 0.22 |
| Information Technology | 90 | 2.42 |
| Materials | 54 | -0.22 |
| Real Estate | 6 | 0.19 |
| Utilities | 15 | -0.2 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 0.6 |
| Alibaba HK | 9988 HK Equity | 3.2 |
| JD.com HK | 9618 HK Equity | 1.5 |
| NetEase HK | 9999 HK Equity | 1 |
| Yum China HK | 9987 HK Equity | -0.2 |
| Baozun HK | 9991 HK Equity | -2 |
| Baidu HK | 9888 HK Equity | 1.1 |
| Autohome HK | 2518 HK Equity | 1.7 |
| Bilibili HK | 9626 HK Equity | 2.5 |
| Trip.com HK | 9961 HK Equity | -0.6 |
| EDU HK | 9901 HK Equity | 2.5 |
| Xpeng HK | 9868 HK Equity | 1 |
| Weibo HK | 9898 HK Equity | 2.6 |
| Li Auto HK | 2015 HK Equity | 0.3 |
| Nio Auto HK | 9866 HK Equity | 2 |
| Zhihu HK | 2390 HK Equity | 1.4 |
| KE HK | 2423 HK Equity | 2.1 |
| Tencent Music Entertainment HK | 1698 HK Equity | 0.1 |
| Meituan HK | 3690 HK Equity | 2.6 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | 0.6 |
| ALIBABA GROUP HOLDING LTD | 3.2 |
| MEITUAN-CLASS B | 2.6 |
| XIAOMI CORP-CLASS B | 1.5 |
| BYD CO LTD-H | 1.4 |
| POP MART INTERNATIONAL GROUP | -1.2 |
| KUAISHOU TECHNOLOGY | 5 |
| SEMICONDUCTOR MANUFACTURING | 4.2 |
| HONG KONG EXCHANGES & CLEAR | 0.5 |
| PING AN INSURANCE GROUP CO-H | 0.4 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| VICTORY GIANT TECHNOLOGY -A | 16.3 |
| ZHONGJI INNOLIGHT CO LTD-A | 5.7 |
| SHENZHEN FORMS SYNTRON INF-A | 10.7 |
| TALKWEB INFORMATION SYSTEM-A | 8.1 |
| EOPTOLINK TECHNOLOGY INC L-A | 4.7 |
| EAST MONEY INFORMATION CO-A | 0.9 |
| FOXCONN INDUSTRIAL INTERNE-A | 5.8 |
| WUS PRINTED CIRCUIT KUNSHA-A | 5.9 |
| LUXSHARE PRECISION INDUSTR-A | 2.7 |
| FUJIAN SNOWMAN GROUP CO-A | 7.3 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.18 versus 7.19 yesterday
- CNY per EUR 8.19 versus 8.19 yesterday
- Yield on 10-Year Government Bond 1.67% versus 1.67% yesterday
- Yield on 10-Year China Development Bank Bond 1.71% versus 1.71% yesterday
- Copper Price -0.10%
- Steel Price +0.10%
