Do You See What I See?
5 Min. Read Time
Key News
Asian equities had another positive day despite President Trump’s semiconductor and pharmaceutical tariff threats yesterday as Vietnam outperformed while India and Taiwan underperformed.
President Trump sounded constructive regarding a potential US–China trade deal. India’s equity market has shown resilience in the face of tariff threats. However, the year-to-date performance chart of India versus Mainland China remains strikingly inverse. Both Hong Kong and Mainland China opened lower but steadily moved higher throughout the session, with internal technical signals remaining strong despite slightly lower trading volumes.
As of yesterday’s close, 79% of stocks in the Shanghai Composite Index traded above their 200-day moving average, compared to 80% for the Shenzhen and 79% for the Hang Seng Index. Notably, there were no 52-week lows reported today. The Shanghai, Shenzhen, and Hang Seng indices recorded 6, 5, and 4 new 52-week highs, respectively. While some stocks are technically overbought, as evidenced by relative strength index (RSI) and moving average convergence divergence (MACD) readings, the market rally remains broad. Coincidentally, Hong Kong Exchanges reported that July trading volume increased 167% year-over-year, driven by an average daily turnover of HK$262.9 billion.
Healthcare stocks in both Hong Kong and Mainland China showed resilience following yesterday’s tariff threats, with XtalPi surging 12.42% after announcing a partnership with DoveTree Medicines. BeiGene (6160 HK, recently renamed BeOne Medicines) reported strong results following the Hong Kong close.
Among Hong Kong growth stocks, Tencent gained 1.7% on another day of strong Southbound Stock Connect inflows, Alibaba rose 0.6%, Meituan declined -1.46% after adjusting merchant subsidies, Pop Mart climbed 7.78%, and BYD edged down -0.45%. Household appliance stocks, including Midea (+0.26%), Hisense (+3.21%), and Haier (+1.38%), advanced after the announcement of an additional RMB 69 billion in subsidies for home appliances, automobiles, and electronics.
Mainland investors purchased $1.208 billion of Hong Kong stocks today, accounting for 58% of Hong Kong’s equity turnover. A Mainland media source noted that yesterday’s policy release from seven government agencies on “new industrialization” financial support explicitly included “anti-involution” language, as we highlighted in yesterday’s report. In a similar regulatory vein, the China Photovoltaic Industry Association has released a draft amendment on “price behavior,” following the July 1st high-level government meeting targeting overproduction and destructive price competition. Shortly thereafter, leading photovoltaic firms called for a 30% cut in solar production to address excess capacity and curb price wars.
Should a US–China trade deal eventually materialize, there will likely be retrospective analysis identifying clear signals only visible in hindsight. In a notable development, Cathay Pacific Airways (293 HK) placed its first aircraft order with Boeing in twelve years, agreeing to purchase fourteen Boeing 777‑9 jets alongside a deal with GE Aerospace for engines. This move comes as part of Cathay’s broader fleet renewal program, with deliveries scheduled to begin in 2026 and the first aircraft expected in 2027. The timing is especially interesting given the ongoing “Made in the USA” policy focus.
The campaign against involution and overcapacity, initially targeting automobiles, steel, cement, solar, and E-Commerce, is also part of this regulatory context. Cathay Pacific shares fell -9.66% after reporting first-half results that beat on revenue and adjusted net income but missed on adjusted earnings per share, coupled with a weak outlook.
The rally in Mainland markets continued to grind higher, underpinned by policy support and strong technical momentum.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0% |
| Hang Seng Tech | HSTECH Index | 0.2% |
| Hong Kong Turnover | HKTurn Index | -6.2% |
| Hong Kong Short Sale Turnover | HKSST Index | -19.6% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 14.9% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 50.8 |
| China (Shanghai) | SHCOMP Index | 0.5% |
| China (Shenzhen) | SZCOMP Index | 0.7% |
| China (STAR Board) | Star50 Index | 0.6% |
| Mainland Turnover | .chturn Index | 8.6% |
| 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 | 0.6% |
| India | SENSEX Index | -0.2% |
| Indonesia | JCI Index | -0.2% |
| Malaysia | FBMKLCI Index | 0.2% |
| Pakistan | KSE100 Index | 1.4% |
| Philippines | PCOMP Index | 0.3% |
| South Korea | KOSPI Index | 0% |
| Taiwan | TWSE Index | -0.9% |
| Thailand | SET Index | 1.4% |
| Singapore | STI Index | 0.5% |
| Australia | AS51 Index | 0.8% |
| Vietnam | VNINDEX Index | 1.7% |
| Indicator | A | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 101% | 123% |
| Advancing Stocks | 237 | 2996 |
| Declining Stocks | 230 | 1865 |
| Outperforming Factors | EPS Revisions, Momentum, Quality | Liquidity, EPS Revisions, Growth |
| Underperforming Factors | Value | Low Volatility |
| Top Sectors | Energy, Communication, Materials | Energy, Materials, Industrials |
| Bottom Sectors | Financials, Utilities, Tech | Communication, Healthcare, Utilities |
| Top Subsectors | Consumer Durables, Paper/Packaging, Coal | Motorcycle, Aerospace/Military, Heavy Machinery |
| Bottom Subsectors | Commercial/Professional Services, Industry Conglomerates, Banks | Soft Drink, Catering Tourism, Pharmaceutical |
| Southbound Connect Buys | SMIC, Tencent (Large), Alibaba, Pop Mart (Moderate), BYD Electronic, Li Auto (Small) | |
| Southbound Connect Sells | Meituan, Xiaomi (Small) |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 152 | 0.26 |
| Communication Services | 9 | 1.32 |
| Consumer Discretionary | 28 | 0.07 |
| Consumer Staples | 13 | 0.26 |
| Energy | 6 | 2.26 |
| Financials | 24 | -0.94 |
| Health Care | 12 | 0.17 |
| Industrials | 21 | -0.2 |
| Information Technology | 10 | -0.3 |
| Materials | 10 | 1.16 |
| Real Estate | 7 | -0.14 |
| Utilities | 12 | -0.52 |
| Mainland China Listed | 395 | 0.28 |
| Communication Services | 7 | -0.8 |
| Consumer Discretionary | 29 | 0.24 |
| Consumer Staples | 24 | -0.02 |
| Energy | 13 | 1.44 |
| Financials | 64 | 0.08 |
| Health Care | 32 | -0.29 |
| Industrials | 61 | 0.61 |
| Information Technology | 90 | 0.38 |
| Materials | 54 | 0.85 |
| Real Estate | 6 | 0.15 |
| Utilities | 15 | -0.21 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 1.7 |
| Alibaba HK | 9988 HK Equity | 0.6 |
| JD.com HK | 9618 HK Equity | -0.3 |
| NetEase HK | 9999 HK Equity | -0.6 |
| Yum China HK | 9987 HK Equity | -6 |
| Baozun HK | 9991 HK Equity | -3.4 |
| Baidu HK | 9888 HK Equity | -0.8 |
| Autohome HK | 2518 HK Equity | -0.9 |
| Bilibili HK | 9626 HK Equity | 1.4 |
| Trip.com HK | 9961 HK Equity | -1.1 |
| EDU HK | 9901 HK Equity | -0.1 |
| Xpeng HK | 9868 HK Equity | 3 |
| Weibo HK | 9898 HK Equity | -0.3 |
| Li Auto HK | 2015 HK Equity | -5.4 |
| Nio Auto HK | 9866 HK Equity | 2 |
| Zhihu HK | 2390 HK Equity | 4.6 |
| KE HK | 2423 HK Equity | 0.8 |
| Tencent Music Entertainment HK | 1698 HK Equity | -0.7 |
| Meituan HK | 3690 HK Equity | -1.5 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | 1.7 |
| ALIBABA GROUP HOLDING LTD | 0.6 |
| XTALPI HOLDINGS LTD | 12.4 |
| MEITUAN-CLASS B | -1.5 |
| POP MART INTERNATIONAL GROUP | 7.9 |
| BYD CO LTD-H | -0.4 |
| SEMICONDUCTOR MANUFACTURI-H | 3.1 |
| LI AUTO INC-CLASS A | -5.4 |
| BYD ELECTRONIC INTL CO LTD | 6.7 |
| XIAOMI CORP-CLASS B | -0.6 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| CHINA CSSC HOLDINGS LTD-A | 10 |
| VICTORY GIANT TECHNOLOGY -A | 4.3 |
| SUNWARD INTELLIGENT EQUIPM-A | 1.9 |
| CHINA NORTHERN RARE EARTH -A | 0.4 |
| EOPTOLINK TECHNOLOGY INC L-A | 2.2 |
| HYGON INFORMATION TECHNOLO-A | -3.6 |
| ZHONGJI INNOLIGHT CO LTD-A | -0.2 |
| SHENZHEN ENVICOOL TECHNOLO-A | 5.1 |
| FOXCONN INDUSTRIAL INTERNE-A | -2.1 |
| WUXI APPTEC CO LTD-A | 0.3 |
Last Night’s Exchange Rates, Prices, & Yields
- CNY per USD 7.18 versus 7.18 yesterday
- CNY per EUR 8.33 versus 8.29 yesterday
- Yield on 10-Year Government Bond 1.70% versus 1.71% yesterday
- Yield on 10-Year China Development Bank Bond 1.79% versus 1.79% yesterday
- Copper Price -0.41%
- Steel Price +0.62%
