Profit Taking & AI Jitters Weigh On Stocks, Week In Review
5 Min. Read Time
Week in Review
- Asian equities were mostly higher in a shortened week for Mainland China and Hong Kong, as Korea and Vietnam outperformed, while Hong Kong and Pakistan underperformed.
- CF Pharmatech, a biotech company, listed shares publicly in Hong Kong for the first time on Wednesday, rising 161% on its debut.
- Mainland China's markets reopened from a week-long market holiday on Thursday to gains, with particular strength in the technology-oriented STAR Market.
- China's "Golden Week" holiday saw significant increases in travel data compared to last year and a surge in use of Alibaba's "Amap" AI-enabled mapping app.
Friday's Key News
Asian equities were mostly lower overnight though Vietnam and Korea managed gains, while Mainland China's STAR Market and Hong Kong underperformed.
Investors appear to have taken profits overnight in recent outperformers, including semiconductors and internet names. There was a rotation into banks, telecom, and real estate overnight, as investors dumped growth in favor of value. Real estate was also supported by an article in the Securities Times, a Mainland financial news source, about new measures to boost real estate demand unleashed by some cities.
Mainland investors were net sellers of Hong Kong-listed stocks and ETFs overnight. However, the net sale was small at only $50 million.
Alibaba's Chairman Joe Tsai urged the US to reconsider its approach to the AI race with China. He said "There's no such thing as winning the race. I think it's a long marathon." He also commented that adoption of AI is the most important aspect, noting that now 50% of firms in China say they have adopted AI. Alibaba was Hong Kong's most heavily-traded stock overnight, falling nearly 5%.
The electric vehicle ecosystem and auto stocks were lower despite the Ministry of Industry & Information Technology (MIIT) expanding the scope of tax exemptions for purchases. The new specifications for tax exemption, which broadened the range of vehicles included, will be in place through 2027. We have said that the US electric vehicle is likely to suffer from the expiration of Biden-era tax credits. Meanwhile, China has tax preferences and rebates in effect through 2027.
Materials names, which had done so well yesterday, fell hard today under selling pressure. The sector and subsector leaders and laggards chart looks like a mirror image of yesterday.
Trip.com was an outperformer, gaining +1.43% on positive travel data from the "Golden Week" holiday this week.
The Brooklyn Nets and Phoenix Suns played in Macau today, marking the return of the NBA to China after six years.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -1.7% |
| Hang Seng Tech | HSTECH Index | -3.3% |
| Hong Kong Turnover | HKTurn Index | -13.7% |
| Hong Kong Short Sale Turnover | HKSST Index | -0.6% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 13.6% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | -50.91 |
| China (Shanghai) | SHCOMP Index | -0.9% |
| China (Shenzhen) | SZCOMP Index | -1.7% |
| China (STAR Board) | Star50 Index | -5.6% |
| Mainland Turnover | .chturn Index | -5.1% |
| 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 | -1% |
| India | SENSEX Index | 0.4% |
| Indonesia | JCI Index | 0.1% |
| Malaysia | FBMKLCI Index | -0.5% |
| Pakistan | KSE100 Index | -0.8% |
| Philippines | PCOMP Index | -0.3% |
| South Korea | KOSPI Index | 1.7% |
| Taiwan | TWSE Index | 0.9% |
| Thailand | SET Index | -2.1% |
| Singapore | STI Index | -0.3% |
| Australia | AS51 Index | -0.1% |
| Vietnam | VNINDEX Index | 1.8% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume as % of 1-Year Average | 142 | 151 |
| Advancing Stocks | 38 (Hang Seng) | 119 (CSI 300) |
| Declining Stocks | 47 (Hang Seng) | 168 (CSI 300) |
| Outperforming Factors | Value | Value |
| Underperforming Factors | Growth | Growth |
| Top Sectors | Real Estate, Energy, Utilities | Energy, Real Estate, Financials |
| Bottom Sectors | Materials, Communication Services, Consumer Discretionary | Information Technology, Industrials, Communication Services |
| Top Subsectors | Construction Materials, Coal, Telecom | Soft Drinks, Forest Industry, Oil & Gas |
| Bottom Subsectors | Non-Ferrous Metals, Electrical Equipment, Semiconductors | Semiconductors, Computer Hardware, Precious Metals |
| Southbound Connect Buys | Xiaomi, Pop Mart, ZTE | N/A |
| Southbound Connect Sells | SMIC, Alibaba, Hua Hong Semiconductor | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | -2.39 |
| Communication Services | 9 | -3.56 |
| Consumer Discretionary | 28 | -3.05 |
| Consumer Staples | 13 | -0.16 |
| Energy | 7 | 0.74 |
| Financials | 23 | 0.37 |
| Health Care | 13 | -2.76 |
| Industrials | 20 | -1.27 |
| Information Technology | 10 | -2.71 |
| Materials | 10 | -5.71 |
| Real Estate | 6 | 0.83 |
| Utilities | 12 | 0.47 |
| Mainland China Listed | 404 | -1.84 |
| Communication Services | 6 | -2.61 |
| Consumer Discretionary | 31 | -0.95 |
| Consumer Staples | 24 | -0.07 |
| Energy | 13 | 1.03 |
| Financials | 64 | 0.37 |
| Health Care | 31 | -2.08 |
| Industrials | 64 | -3.11 |
| Information Technology | 91 | -4.69 |
| Materials | 58 | -1.73 |
| Real Estate | 6 | 0.51 |
| Utilities | 16 | 0.28 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -3.6 |
| Alibaba HK | 9988 HK Equity | -4.6 |
| JD.com HK | 9618 HK Equity | -2.9 |
| NetEase HK | 9999 HK Equity | -1.2 |
| Yum China HK | 9987 HK Equity | 3.6 |
| Baozun HK | 9991 HK Equity | -2 |
| Baidu HK | 9888 HK Equity | -5.7 |
| Autohome HK | 2518 HK Equity | -2.3 |
| Bilibili HK | 9626 HK Equity | -3.4 |
| Trip.com HK | 9961 HK Equity | 1.4 |
| EDU HK | 9901 HK Equity | 0.2 |
| Xpeng HK | 9868 HK Equity | -4.2 |
| Weibo HK | 9898 HK Equity | -5.2 |
| Li Auto HK | 2015 HK Equity | -2.6 |
| Nio Auto HK | 9866 HK Equity | -5.1 |
| Zhihu HK | 2390 HK Equity | -7.9 |
| KE HK | 2423 HK Equity | -0.2 |
| Tencent Music Entertainment HK | 1698 HK Equity | -1 |
| Meituan HK | 3690 HK Equity | -1.8 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | -4.6 |
| SEMICONDUCTOR MANUFACTURI-H | -7.1 |
| TENCENT HOLDINGS LTD | -3.6 |
| XIAOMI CORP-CLASS B | -2.4 |
| HUA HONG SEMICONDUCTOR LTD-H | -4 |
| POP MART INTERNATIONAL GROUP | -1.1 |
| MEITUAN-CLASS B | -1.8 |
| ZIJIN MINING GROUP CO LTD-H | -6.9 |
| ZTE CORP-H | 4 |
| XTALPI HOLDINGS LTD | -7.4 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZTE CORP-A | 4 |
| SEMICONDUCTOR MANUFACTURIN-A | -7.9 |
| CONTEMPORARY AMPEREX TECHN-A | -6.8 |
| CHINA NORTHERN RARE EARTH -A | -1.2 |
| SUNGROW POWER SUPPLY CO LT-A | -7.8 |
| LUXSHARE PRECISION INDUSTR-A | -6.9 |
| EAST MONEY INFORMATION CO-A | -2.5 |
| EOPTOLINK TECHNOLOGY INC L-A | -1.4 |
| TONGFU MICROELECTRONIC CO-A | 3.2 |
| ZHONGJI INNOLIGHT CO LTD-A | -2.2 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.12 versus 7.13 yesterday
- CNY per EUR 8.24 versus 8.23 yesterday
- Yield on 10-Year Government Bond 1.85% versus 1.85% yesterday
- Yield on 10-Year China Development Bank Bond 1.97% versus 1.97% yesterday
- Copper Price 0.00%
- Steel Price 0.52%
