Asian equities cheered the confirmation of the de-escalation in the Middle East and a potential July US interest rate cut, led by Hong Kong, Mainland China, and Taiwan.

China’s markets grinded higher across the trading day on strong volume and breadth. The key catalyst was that six Chinese government agencies announced the release of the "Guiding Opinions on Financial Support to Boost and Expand Consumption" following the State Council’s guidance on expanding  “financial support to boost and expand consumption”.

The People's Bank of China (PBOC), National Development & Reform Commission (NDRC), Ministry of Finance (MoF), Ministry of Commerce (MoC), China Banking & Insurance Regulatory Commission (CBIRC), and the China Securities Regulatory Commission (CSRC) release focused on six topics and 19 key measures to “combine the implementation of the strategy of expanding domestic demand with deepening the structural reform of the financial supply side, increase the investment in the financial resources provided by consumption, and improve the level of financial services for consumer demand“.  The measures include:

• Supporting the enhancement of consumption capacity and cultivating consumption demand by encouraging financial institutions to establish pensions for individual workers.
• Setting up a service consumption and pension re-lending program with a quota of CNY 500 billion for loans for key areas of service consumption, to be issued by 21 national financial institutions and five urban commercial banks nationwide.
• Increasing financial support for key consumption areas to help tap and unleash consumption potential.
• Strengthening financial support for consumption infrastructure and circulation system, while promoting consumption supply efficiency.
• Strengthening basic financial services to help optimize the consumption environment.
• Strengthening organizational guarantees.

The NDRC will host a press conference tomorrow on the subject.

Vice Premier He Lifeng was in Hebei to “conduct on-site research on the exchange of old appliances for new ones, real estate development and sales”.  Premier Li spoke at the Summer Davos in Tianjin, stating that China’s status as a "super-sized consumption powerhouse” will be upheld. It seems to be a recurring theme!

Hong Kong and Mainland-listed financial stocks had a strong day, led by brokers and insurance as beneficiaries of the push to expand use of the plan to expand and promote personal pensions and annuities.  Also helping brokerage stocks was Guotai Junan International, which gained +198% after being approved by Hong Kong’s Securities and Futures Commission (SFC) to allow crypto trading.

Internet stocks had a good day as well, as it was a very broad rally in both markets. Mainland investors bought a healthy $1.22 billion worth of Hong Kong-listed stocks and ETFs via Southbound Stock Connect today, as 53% of Hong Kong trading was Connect-related. To me, this continues to show a lack of foreign investor involvement, despite the strong rally since January 2024. The Mainland market is finally showing some animal spirits as 117 stocks hit 52-week highs versus only 4 hitting 52-week lows.

Mainland military stocks outperformed on news that a military parade will be held on September 3rd, celebrating the 80^th anniversary of the end of World War II

All told, it was a strong day!

Last Night's Performance

Country / Index	Ticker	1-Day Change
China (Hong Kong)	HSI Index	1.2%
Hang Seng Tech	HSTECH Index	1.2%
Hong Kong Turnover	HKTurn Index	11.4%
Hong Kong Short Sale Turnover	HKSST Index	7.3%
Short Turnover as a % of Hong Kong Turnover	N/A	12.9%
Southbound Stock Connect Net Buy/Sell (US $ Millions)	N/A	140.3
China (Shanghai)	SHCOMP Index	1%
China (Shenzhen)	SZCOMP Index	1.4%
China (STAR Board)	Star50 Index	1.7%
Mainland Turnover	.chturn Index	13.4%
Northbound Stock Connect Net Buy/Sell (US $ Millions)	N/A	Not Available
Jing Daily China Global Luxury Index	CHINALUX Index	-0.3%
Japan	NKY Index	0.4%
India	SENSEX Index	0.9%
Indonesia	JCI Index	-0.5%
Malaysia	FBMKLCI Index	0.4%
Pakistan	KSE100 Index	0.2%
Philippines	PCOMP Index	0.5%
South Korea	KOSPI Index	0.1%
Taiwan	TWSE Index	1.1%
Thailand	SET Index	0.7%
Singapore	STI Index	0.6%
Australia	AS51 Index	0%
Vietnam	VNINDEX Index	0%

Indicator
Today's Volume as % of 1-Year Average	137	125
Advancing Stocks	357	3,312
Declining Stocks	125	1,578
Outperforming Factors	Liquidity, Growth, Value	Momentum, Liquidity, EPS Revisions
Underperforming Factors	EPS Revision, Momentum, Dividend Yield	Low Volatility, Value, Dividend Yield
Top Sectors	Real Estate, Financials, Discretionary	Financials, Tech, Discretionary
Bottom Sectors	Tech, Energy
Top Subsectors	Semis, Electrical Equipment, Financial Services	Securities, Diversified Financials, Aerospace/Military
Bottom Subsectors	Consumer Durables/Apparel, Consumer Services, Healthcare Equipment	Energy Equipment, Marine, Fertilizer/Pesticide
Southbound Connect Buys	Guotai Junan, SMIC (Large), Holly Futures, Pop Mart, Zara Online (Small)
Southbound Connect Sells	Alibaba, Tencent (Moderate), Meituan, Xiaomi (Small)

MSCI China All Shares Index	# of Stocks	Average 1-Day Change (%)
Hong Kong Listed	151	1.16
Communication Services	9	0.62
Consumer Discretionary	28	1.55
Consumer Staples	13	0.84
Energy	7	0
Financials	23	2.02
Health Care	13	0.49
Industrials	20	1.24
Information Technology	10	-0.06
Materials	10	0.92
Real Estate	6	2.91
Utilities	12	0.81
Mainland China Listed	404	1.51
Communication Services	6	1.22
Consumer Discretionary	31	1.51
Consumer Staples	24	0.3
Energy	13	0.01
Financials	64	2.58
Health Care	31	1.04
Industrials	64	1.46
Information Technology	91	1.7
Materials	58	0.86
Real Estate	6	1.33
Utilities	16	0.99

US & Hong Kong Dually Listed	Ticker	1-Day Change (%)
Tencent HK	700 HK Equity	0.6
Alibaba HK	9988 HK Equity	2.5
JD.com HK	9618 HK Equity	2.5
NetEase HK	9999 HK Equity	0.7
Yum China HK	9987 HK Equity	0.5
Baozun HK	9991 HK Equity	2.7
Baidu HK	9888 HK Equity	1.5
Autohome HK	2518 HK Equity	0.9
Bilibili HK	9626 HK Equity	0.9
Trip.com HK	9961 HK Equity	1.1
EDU HK	9901 HK Equity	8.8
Xpeng HK	9868 HK Equity	-0.3
Weibo HK	9898 HK Equity	3.3
Li Auto HK	2015 HK Equity	0
Nio Auto HK	9866 HK Equity	1.8
Zhihu HK	2390 HK Equity	4.9
KE HK	2423 HK Equity	3.2
Tencent Music Entertainment HK	1698 HK Equity	1.4
Meituan HK	3690 HK Equity	1.4

Hong Kong's Most Heavily Traded by Value	1-Day Change (%)
GUOTAI JUNAN INTERNATIONAL	198.4
ALIBABA GROUP HOLDING LTD	2.5
TENCENT HOLDINGS LTD	0.6
XIAOMI CORP-CLASS B	-0.4
SEMICONDUCTOR MANUFACTURING	5.6
MEITUAN-CLASS B	1.4
PING AN INSURANCE GROUP CO-H	3
HONG KONG EXCHANGES & CLEAR	1.7
POP MART INTERNATIONAL GROUP	-1.9
HSBC HOLDINGS PLC	1.6

Shanghai and Shenzhen's Most Heavily Traded by Value	1-Day Change (%)
VISUAL CHINA GROUP CO LTD-A	1.4
SHANTUI CONSTRUCTION MACHI-A	1.1
EAST MONEY INFORMATION CO-A	10
HITHINK ROYALFLUSH INFORMA-A	14.5
GOTION HIGH-TECH CO LTD-A	8.2
CONTEMPORARY AMPEREX TECHN-A	3.7
CITIC SECURITIES CO-A	4.2
SHENZHEN FORMS SYNTRON INF-A	1.1
BEIJING COMPASS TECHNOLOGY-A	20
GUOTAI HAITONG SECURITIES CO	9.1

Last Night's Exchange Rates, Prices, & Yields

• CNY per USD 7.18 versus 7.17 yesterday
• CNY per EUR 8.34 versus 8.34 yesterday
• Yield on 10-Year Government Bond 1.65% versus 1.65% yesterday
• Yield on 10-Year China Development Bank Bond 1.70% versus 1.69% yesterday
• Copper Price 0.14%
• Steel Price -0.54%