Semiconductor Stocks Soar, Tariff Deadline Extended (Again)
5 Min. Read Time
Key News
Asian equities were mostly higher overnight on the US’ decision to extend the tariff “deadline” once again (shocking), as Indonesia and Japan outperformed, while Korea and Thailand underperformed.
Hong Kong and Mainland markets were both higher overnight, though the Hang Seng Tech Index closed lower by the end of the session on mixed performance from internet name, though technology hardware names largely did well. Alibaba’s Hong Kong-listed shares were slightly lower overnight, Kuaishou was sharply lower, and Meituan was slightly higher. Mainland investors had another billion-plus day, in dollar terms, of net buying of Hong Kong-listed stocks and ETFs via Southbound Stock Connect.
Trump extended the tariff “deadline” once again for another three months or 90 days. Why does this keep getting extended? Likely because the Trump team knows that $3,000 to $5,000 iPhones would be highly destabilizing to the US economy. It’s the Art of the Deal! The deadline is likely to continue to get extended until we get a deal. There remain many chances for a Trump-Xi Summit in the fall, including the September 9th commemoration of the end of World War II in Beijing, the UN General Assembly (UNGA), also in September, and APEC in October. We will see, though it looks like the president will be meeting Puttin first.
Kuaishou fell nearly -10% in Hong Kong overnight after the video platform added a food delivery section to its “super app” that links to Meituan. The sell-off was likely overblown, but investors have become very sensitive to the potential margin impact of instant commerce and food delivery promotions. Thankfully, Kuaishou does not appear to be starting its own business in the space.
Wang Yiming from the PBOC commented on instance commerce price wats and China’s anti-involution policy to combat this, explaining that it is not anticompetitive. Per the South China Morning Post, he said that “It [the policy] is not against competition itself, but against behaviors that undermine fair competition. Instead, the goal is to raise competition to a higher level – moving away from a zero-sum mindset towards a win-win approach through innovation, quality upgrades and a better industrial ecosystem.” His comments may have helped Meituan’s stock remain positive for the session.
Semiconductor companies Cambricon Technologies, which is listed on the STAR Market and gained +20% overnight, Foxconn Industrial, which gained +9%, were higher on government guidance against the use of Nvidia’s H20 chips in China, for which the American semiconductor maker just secured an export license. It is likely stemming from the US government’s demand to take a cut of Nvidia’s China sales revenue.
Internet earnings will kick off this week with Tencent, which will report second quarter results tomorrow.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.3% |
| Hang Seng Tech | HSTECH Index | -0.4% |
| Hong Kong Turnover | HKTurn Index | 7.2% |
| Hong Kong Short Sale Turnover | HKSST Index | 20.3% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 16.5% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 1,210 |
| China (Shanghai) | SHCOMP Index | 0.5% |
| China (Shenzhen) | SZCOMP Index | 0.3% |
| China (STAR Board) | Star50 Index | 1.9% |
| Mainland Turnover | .chturn Index | 3% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | 0.9% |
| Japan | NKY Index | 2.1% |
| India | SENSEX Index | -0.5% |
| Indonesia | JCI Index | 2.4% |
| Malaysia | FBMKLCI Index | 0.3% |
| Pakistan | KSE100 Index | 0.1% |
| Philippines | PCOMP Index | 0.6% |
| South Korea | KOSPI Index | -0.5% |
| Taiwan | TWSE Index | 0.1% |
| Thailand | SET Index | -0.5% |
| Singapore | STI Index | -0.3% |
| Australia | AS51 Index | 0.4% |
| Vietnam | VNINDEX Index | 0.7% |
| Indicator | Hong Kong | Mainland |
|---|---|---|
| Today's Volume as % of 1-Year Average | 101 | 129 |
| Advancing Stocks | 56 (Hang Seng) | 152 (CSI 300) |
| Declining Stocks | 28 (Hang Seng) | 140 (CSI 300) |
| Outperforming Factors | Value | Dividend Growth, Momentum |
| Underperforming Factors | Growth | Value |
| Top Sectors | Energy, Financials, Information Technology | Information Technology, Energy, Consumer Discretionary |
| Bottom Sectors | Health Care, Communication Services, Consumer Discretionary | Consumer Staples, Material, Industrials |
| Top Subsectors | Semiconductors, Coal, Chemical Industry | Motorcycles, Computer Hardware, Semiconductors |
| Bottom Subsectors | Media & Entertainment, Paper & Packaging, Consumer Durables | Aerospace, Chemical Fibers, Steel |
| Southbound Connect Buys | Tencent, Alibaba, Xiaomi | N/A |
| Southbound Connect Sells | Kuaishou, Hua Hong Semiconductor, Meituan | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | 0.02 |
| Communication Services | 9 | -0.67 |
| Consumer Discretionary | 28 | -0.67 |
| Consumer Staples | 13 | 0.75 |
| Energy | 7 | 2.08 |
| Financials | 23 | 1.28 |
| Health Care | 13 | -1.52 |
| Industrials | 20 | 0.35 |
| Information Technology | 10 | 1.26 |
| Materials | 10 | 0.57 |
| Real Estate | 6 | 1.13 |
| Utilities | 12 | 0.75 |
| Mainland China Listed | 404 | 0.48 |
| Communication Services | 6 | 0.07 |
| Consumer Discretionary | 31 | 0.5 |
| Consumer Staples | 24 | -0.43 |
| Energy | 13 | 1.07 |
| Financials | 64 | 0.42 |
| Health Care | 31 | -0.02 |
| Industrials | 64 | -0.16 |
| Information Technology | 91 | 2.17 |
| Materials | 58 | -0.17 |
| Real Estate | 6 | 0.05 |
| Utilities | 16 | 0.03 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -0.3 |
| Alibaba HK | 9988 HK Equity | -1.6 |
| JD.com HK | 9618 HK Equity | 0.3 |
| NetEase HK | 9999 HK Equity | 1.1 |
| Yum China HK | 9987 HK Equity | -0.2 |
| Baozun HK | 9991 HK Equity | -1.2 |
| Baidu HK | 9888 HK Equity | -1.3 |
| Autohome HK | 2518 HK Equity | -0.8 |
| Bilibili HK | 9626 HK Equity | -3.7 |
| Trip.com HK | 9961 HK Equity | 0.3 |
| EDU HK | 9901 HK Equity | -0.3 |
| Xpeng HK | 9868 HK Equity | -1.9 |
| Weibo HK | 9898 HK Equity | -0.2 |
| Li Auto HK | 2015 HK Equity | -1.1 |
| Nio Auto HK | 9866 HK Equity | -2.6 |
| Zhihu HK | 2390 HK Equity | -3.9 |
| KE HK | 2423 HK Equity | -0.6 |
| Tencent Music Entertainment HK | 1698 HK Equity | 1.7 |
| Meituan HK | 3690 HK Equity | 0.2 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| KUAISHOU TECHNOLOGY | -9.3 |
| TENCENT HOLDINGS LTD | -0.3 |
| XIAOMI CORP-CLASS B | 1.8 |
| ALIBABA GROUP HOLDING LTD | -1.6 |
| SEMICONDUCTOR MANUFACTURI-H | 5 |
| MEITUAN-CLASS B | 0.2 |
| XTALPI HOLDINGS LTD | 0 |
| BYD CO LTD-H | -0.2 |
| HUA HONG SEMICONDUCTOR LTD-H | 5.4 |
| PING AN INSURANCE GROUP CO-H | 2.1 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| CAMBRICON TECHNOLOGIES-A | 20 |
| EOPTOLINK TECHNOLOGY INC L-A | 6.2 |
| ZHONGJI INNOLIGHT CO LTD-A | 5.1 |
| EAST MONEY INFORMATION CO-A | 0.8 |
| FOXCONN INDUSTRIAL INTERNE-A | 9.2 |
| VICTORY GIANT TECHNOLOGY -A | 7.1 |
| ANHUI GREAT WALL MILITARY -A | 8 |
| CHINA NORTHERN RARE EARTH -A | -3.1 |
| TIANQI LITHIUM CORP-A | 2.2 |
| HYGON INFORMATION TECHNOLO-A | 2.1 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.19 versus 7.19 yesterday
- CNY per EUR 8.35 versus 8.35 yesterday
- Yield on 10-Year Government Bond 1.73% versus 1.72% yesterday
- Yield on 10-Year China Development Bank Bond 1.83% versus 1.81% yesterday
- Copper Price 0.49%
- Steel Price 0.43%
