Daily Posts

Trade Truce Back On

5 Min. Read Time

Key News

Asian equity markets cheered the readout from the US-China trade talks in London, as Taiwan and South Korea outperformed, while Singapore and Indonesia underperformed.

The London talks re-implemented the Geneva agreement, marking a positive step that could pave the way for further negotiations to unwind the trade war. The big picture: the Chinese government’s release made clear that the recent phone conversation between President Trump and President Xi Jinping was critical in making a deal feasible. One could argue there have been more substantive discussions during Trump’s first six months than during the previous administration’s four years.

The Hang Seng Index cleared its pre-Liberation Day level and is closing in on its mid-March high, which would put it about 20% below its all-time high from February 2021. The Hang Seng Tech Index, Shanghai Composite Index, and Shenzhen Composite Index all returned to their pre-Liberation Day levels and continued to grind higher.

Hong Kong saw another broad rally, with both growth (internet, electric vehicle/hybrid) and value (brokerage, precious metals, mining/metals, oil) sectors participating. Alibaba Group Holding Limited rose +1.34% despite going ex-dividend today, with a Hong Kong dividend of HK$0.13 and a US dividend of $1.05 per share. Gaming stocks were notably higher, led by Bilibili (+9.92%), NetEase (+2.05%), and Tencent (+0.88%), following a government release supporting gaming companies’ efforts to “go global.”

The electric vehicle (EV) and hybrid sector also advanced, as BYD (+3.83%), XPeng (+3.02%), and NIO (+4.04%) outperformed. The rally was partly attributed to reports that auto companies had agreed to pay part suppliers within 60 days. The China Association of Automobile Manufacturers announced that, year-to-date through the end of May, 12.826 million cars were produced in China (+12.7% year-over-year) and 12.748 million cars were sold (+10.9% year-over-year). Notably, 44% of all cars sold were EVs and hybrids. Year-to-date through the end of May, EV and hybrid sales grew +44% year-over-year to 5.608 million units.

Brokerage and financial stocks were higher on reports that the Shenzhen Stock Exchange would list Hong Kong stocks, though details remain sparse.

Healthcare, which had been on a recent tear, declined in both Hong Kong (-0.79%) and Mainland China (-0.22%), perhaps a case of tempting fate.

Mainland China also had a good session, though trading volumes were slightly below average. The Ministry of Finance announced support for improving the “basic pension security level,” especially for the country’s 300 million elderly, as well as further backing for free preschool education and accelerated implementation of the child care subsidy system.

On the corporate front, Starbucks appears closer to selling a stake in its China business, according to Chinese financial media. The Ministry of Foreign Affairs weighed in on the Panama port sale by CK Holdings, stating opposition to “coercion and bullying.” The port sale has been quiet lately—similar to the TikTok ban—proving the old adage: out of sight, out of mind!

Last Night's Performance

Country / IndexTicker1-Day Change
China (Hong Kong)HSI Index0.8%
Hang Seng TechHSTECH Index1.1%
Hong Kong TurnoverHKTurn Index-6.1%
Hong Kong Short Sale TurnoverHKSST Index-5.8%
Short Turnover as a % of Hong Kong TurnoverN/A13.9%
Southbound Stock Connect Net Buy/Sell (US $ Millions)N/A137.8
China (Shanghai)SHCOMP Index0.5%
China (Shenzhen)SZCOMP Index0.7%
China (STAR Board)Star50 Index-0.2%
Mainland Turnover.chturn Index0%
Nouthbound Stock Connect Net Buy/Sell (US $ Millions)N/ANot Available
Jing Daily China Global Luxury IndexCHINALUX Index0.3%
JapanNKY Index0.5%
IndiaSENSEX Index0.1%
IndonesiaJCI Index-0.1%
MalaysiaFBMKLCI Index0.5%
PakistanKSE100 Index1.9%
PhilippinesPCOMP Index0.5%
South KoreaKOSPI Index1.2%
TaiwanTWSE Index1%
ThailandSET Index0.2%
SingaporeSTI Index-0.4%
AustraliaAS51 Index0.1%
VietnamVNINDEX Index-0.1%
IndicatorAMainland China
Today's Volume % of 1-Year Average124%99%
Advancing Stocks3353350
Declining Stocks1411543
Outperforming FactorsValue, Large Cap, Dividend YieldEPS Revision, Value, Dividend Yield
Underperforming FactorsGrowth, Low Volatility, MomentumQuality, Low Volatility, Momentum
Top SectorsMaterials, Financials, EnergyConsumer Discretionary, Materials, Financials
Bottom SectorsStaples, HealthcareHealthcare
Top SubsectorsConsumer Durables/Apparel, Electrical Equipment, Non Ferrous MetalBase Metals, Insurance, Auto
Bottom SubsectorsConsumer Staples Distribution, Food, Commercial/Professional ServicesDaily Chemical, Port, Pharmaceutical
Southbound Connect BuysMeituan (Small)
Southbound Connect SellsAlibaba, Tencent, Xiaomi (Large), CSPC Pharma, Pop Mart (Small)
MSCI China All Shares Index# of StocksAverage 1-Day Change (%)
Hong Kong Listed1521.21
Communication Services91.1
Consumer Discretionary281.21
Consumer Staples13-0.95
Energy61.56
Financials242.23
Health Care12-0.79
Industrials211.01
Information Technology101.14
Materials102.56
Real Estate70.18
Utilities120.1
Mainland China Listed3950.71
Communication Services70.29
Consumer Discretionary291.41
Consumer Staples240.59
Energy130.94
Financials641.01
Health Care32-0.16
Industrials610.9
Information Technology900.07
Materials541.19
Real Estate60.21
Utilities150.26
US & Hong Kong Dually ListedTicker1-Day Change (%)
Tencent HK700 HK Equity0.9
Alibaba HK9988 HK Equity1.3
JD.com HK9618 HK Equity1.5
NetEase HK9999 HK Equity2.1
Yum China HK9987 HK Equity0.2
Baozun HK9991 HK Equity-0.7
Baidu HK9888 HK Equity1.3
Autohome HK2518 HK Equity0.9
Bilibili HK9626 HK Equity9.9
Trip.com HK9961 HK Equity-0.2
EDU HK9901 HK Equity1.5
Xpeng HK9868 HK Equity3
Weibo HK9898 HK Equity0.6
Li Auto HK2015 HK Equity-0.9
Nio Auto HK9866 HK Equity4
Zhihu HK2390 HK Equity0.6
KE HK2423 HK Equity-1.8
Tencent Music Entertainment HK1698 HK Equity-1.4
Meituan HK3690 HK Equity-0.4
Hong Kong's Most Heavily Traded by Value 1-Day Change (%)
XIAOMI CORP-CLASS B1.2
TENCENT HOLDINGS LTD0.9
BYD CO LTD-H3.8
MEITUAN-CLASS B-0.4
ALIBABA GROUP HOLDING LTD1.3
POP MART INTERNATIONAL GROUP4.3
PING AN INSURANCE GROUP CO-H2.7
BILIBILI INC-CLASS Z9.9
KUAISHOU TECHNOLOGY1.1
HONG KONG EXCHANGES & CLEAR1.4
Shanghai and Shenzhen's Most Heavily Traded by Value 1-Day Change (%)
EAST MONEY INFORMATION CO-A2.5
DAWNING INFORMATION INDUST-A2.2
ANHUI JIANGHUAI AUTO GROUP-A6.9
BYD CO LTD -A2.5
CONTEMPORARY AMPEREX TECHN-A3
SHENZHEN FORMS SYNTRON INF-A4.6
VICTORY GIANT TECHNOLOGY -A2.1
KWEICHOW MOUTAI CO LTD-A0.3
CHINA NORTHERN RARE EARTH -A3.4
HYGON INFORMATION TECHNOLO-A-4.6

Last Night’s Exchange Rates, Prices, & Yields

  • CNY per USD 7.18 versus 7.18 yesterday
  • CNY per EUR 8.22 versus 8.20 yesterday
  • Yield on 10-Year Government Bond 1.64% versus 1.66% yesterday
  • Yield on 10-Year China Development Bank Bond 1.70% versus 1.71% yesterday
  • Copper Price +0.06%
  • Steel Price +0.61%