Technology Stocks Lead Markets On Alibaba AI Investment & Nvidia Partnership
5 Min. Read Time
Key News
Asian Equities were mixed overnight as Mainland China's STAR Market and Hong Kong's Hang Seng Tech Index both outperformed, while Australia and India underperformed.
Alibaba announced that it will raise $53 billion for AI investments over the next three years, which was cheered by investors. Alibaba continues to be an AI leader in China, but this investment will help the company augment its profile and reach globally as well as establish new data centers across China. The company also announced, quite surprisingly, at a conference that it would be partnering with Nvidia on physical AI.
This was only one of multiple positive catalysts powering technology and growth stocks and sectors higher overnight. Kuaishou also released a new AI model after the company's Kling AI video generation service has been extremely successful abroad.
Robotics stocks also outperformed, especially UB Tech Robotics, which was one of the top net buys by Mainland investors in Southbound Stock Connect.
The technology and AI rally overnight shows that investors are continuing to recognize China's capabilities in this arena. It has been one year today (September 24, 2024) since China's market regulators and central bank announced massive plans to stimulate China's stock market. Many of the measures they announced were completely unprecedented, and the markets shot up immediately, with some overseas ETFs on China's stocks shooting up while their underlying markets were closed for the Golden Week holiday, leading to steep premiums. The initial rally was interpreted by some to be a false start, as it quickly faded as the overseas momentum and enthusiasm was not matched onshore. But, following that initial spike, we have seen a steady grind higher ever since, both offshore and onshore, though the latter has outperformed. The MSCI China All Shares Index is up 42.63% since that announcement, as of yesterday's US market close. This highlights the importance of a long-term, strategic asset allocation to China, in our opinion. China is volatile, but it is very difficult to play the market tactically.
Trump and Xi are said to be planning a meeting next month, following the UN General Assembly here in New York. If you are in Manhattan, you know that the UN is in town when the streets are almost completely blocked. We are not sure whether the two events are related, but with the TikTok deal in the works, it seems that the US-China relationship is actually seeing some significant tailwinds this time. Geopolitically, the US will need China to cooperate to put real pressure on Russia. With the potential purchase of Boeing jets from China, more oil imports from the US could also be in the works. Remember those tariffs? We suppose that they are not really happening anymore.
China is gearing up for the Golden Week holiday, which will begin on Wednesday next week and involve a market closure on the Mainland until the following Wednesday (October 1st).
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 1.4% |
| Hang Seng Tech | HSTECH Index | 2.5% |
| Hong Kong Turnover | HKTurn Index | -2% |
| Hong Kong Short Sale Turnover | HKSST Index | 6.9% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 15.3% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 1,750.26 |
| China (Shanghai) | SHCOMP Index | 0.8% |
| China (Shenzhen) | SZCOMP Index | 1.6% |
| China (STAR Board) | Star50 Index | 3.5% |
| Mainland Turnover | .chturn Index | -6.7% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | 0.1% |
| Japan | NKY Index | 0.3% |
| India | SENSEX Index | -0.5% |
| Indonesia | JCI Index | 0% |
| Malaysia | FBMKLCI Index | -0.2% |
| Pakistan | KSE100 Index | 0.2% |
| Philippines | PCOMP Index | -0.2% |
| South Korea | KOSPI Index | -0.4% |
| Taiwan | TWSE Index | -0.2% |
| Thailand | SET Index | 0.4% |
| Singapore | STI Index | -0.3% |
| Australia | AS51 Index | -0.9% |
| Vietnam | VNINDEX Index | 1.4% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume as % of 1-Year Average | 120 | 140 |
| Advancing Stocks | 49 (Hang Seng) | 220 (CSI 300) |
| Declining Stocks | 36(Hang Seng) | 72(CSI 300) |
| Outperforming Factors | Growth | Growth |
| Underperforming Factors | Value | Value |
| Top Sectors | Consumer Discretionary, Information Technology, Communication Services | Real Estate, Communication Services, Information Technology |
| Bottom Sectors | Materials, Consumer Staples, Health Care | Utilities, Consumer Staples, Financials |
| Top Subsectors | Retail, Semiconductors, Software | Semiconductors, Energy Equipment, Chemicals |
| Bottom Subsectors | Household & Personal Items, Consumer Durables, Paper & Packaging | Tourism, Banks, Ports |
| Southbound Connect Buys | Alibaba, Tencent, SDHG | N/A |
| Southbound Connect Sells | ZTE, Xiaomi, UBTech | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | 2.1 |
| Communication Services | 9 | 1.75 |
| Consumer Discretionary | 28 | 4.83 |
| Consumer Staples | 13 | -0.34 |
| Energy | 7 | -0.17 |
| Financials | 23 | -0.1 |
| Health Care | 13 | -0.23 |
| Industrials | 20 | 0.61 |
| Information Technology | 10 | 2.48 |
| Materials | 10 | -0.68 |
| Real Estate | 6 | 0.5 |
| Utilities | 12 | -0.18 |
| Mainland China Listed | 404 | 0.76 |
| Communication Services | 6 | 2.21 |
| Consumer Discretionary | 31 | 0.24 |
| Consumer Staples | 24 | -0.2 |
| Energy | 13 | 0.15 |
| Financials | 64 | -0.1 |
| Health Care | 31 | 1.15 |
| Industrials | 64 | 1.61 |
| Information Technology | 91 | 1.61 |
| Materials | 58 | 0.73 |
| Real Estate | 6 | 2.67 |
| Utilities | 16 | -0.47 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 2 |
| Alibaba HK | 9988 HK Equity | 9.2 |
| JD.com HK | 9618 HK Equity | 3.7 |
| NetEase HK | 9999 HK Equity | 0 |
| Yum China HK | 9987 HK Equity | 0.3 |
| Baozun HK | 9991 HK Equity | -4.8 |
| Baidu HK | 9888 HK Equity | 0.2 |
| Autohome HK | 2518 HK Equity | -3 |
| Bilibili HK | 9626 HK Equity | 1.5 |
| Trip.com HK | 9961 HK Equity | 1.5 |
| EDU HK | 9901 HK Equity | -1.7 |
| Xpeng HK | 9868 HK Equity | -0.7 |
| Weibo HK | 9898 HK Equity | 0.4 |
| Li Auto HK | 2015 HK Equity | 1.6 |
| Nio Auto HK | 9866 HK Equity | 3.2 |
| Zhihu HK | 2390 HK Equity | -4.1 |
| KE HK | 2423 HK Equity | 1.3 |
| Tencent Music Entertainment HK | 1698 HK Equity | -4.6 |
| Meituan HK | 3690 HK Equity | 1.2 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | 9.2 |
| TENCENT HOLDINGS LTD | 2 |
| SEMICONDUCTOR MANUFACTURI-H | 5.7 |
| XIAOMI CORP-CLASS B | 2.6 |
| MEITUAN-CLASS B | 1.2 |
| SHANDONG HI-SPEED HOLDINGS | -6 |
| BAIDU INC-CLASS A | 0.2 |
| HUA HONG SEMICONDUCTOR LTD-H | 3.9 |
| KUAISHOU TECHNOLOGY | 3.8 |
| POP MART INTERNATIONAL GROUP | -2 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| LUXSHARE PRECISION INDUSTR-A | 6.8 |
| SEMICONDUCTOR MANUFACTURIN-A | 5 |
| SUNGROW POWER SUPPLY CO LT-A | 7.4 |
| ZHONGJI INNOLIGHT CO LTD-A | -2.5 |
| EOPTOLINK TECHNOLOGY INC L-A | 0.5 |
| SHENZHEN H&T INTELLIGENT-A | 1.5 |
| CONTEMPORARY AMPEREX TECHN-A | 3.2 |
| HYGON INFORMATION TECHNOLO-A | 2.1 |
| CAMBRICON TECHNOLOGIES-A | 1.7 |
| FOXCONN INDUSTRIAL INTERNE-A | -3.2 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.13 versus 7.11 yesterday
- CNY per EUR 8.37 versus 8.41 yesterday
- Yield on 10-Year Government Bond 1.90% versus 1.88% yesterday
- Yield on 10-Year China Development Bank Bond 1.96% versus 1.95% yesterday
- Copper Price 0.03%
- Steel Price 0.03%
