Mainland Hardware Stocks Up On Nvidia News, Renminbi Rises Ahead Of Fed Decision
5 Min. Read Time
Key News
Asian equities were mixed on light volumes as investors wait for the US Fed rate decision tomorrow.
The US dollar was weaker as the CNY closed at 7.0642 per US dollar, which is just off last Wednesday’s 52-week high of 7.0639. While a stronger Renminbi is usually beneficial for risk assets, that was not the case, especially in Hong Kong, despite President Trump allowing Nvidia to sell H200 chips with a 25% cut in the US government tax.
The Politburo’s economic release appeared strong to me, as it focused on raising domestic consumption and maintaining “proactive fiscal policy alongside a moderately loose monetary policy”. No one should be surprised by the lack of stimulus numbers, though we should get some clarity from the Central Economic Work Conference (CEWC) this week.
Mainland-listed technology hardware stocks were a bright spot today post-Nvidia news as Zhongji Innolight gained +6.32%, Foxconn gained +7.22%, and Luxshare gained +0.87%. Foreign investors, who predominantly invest in Hong Kong-listed stocks, as opposed to Mainland-listed stocks, might have perceived the Nvidia approval as a negative development for Hong Kong-listed semiconductor stocks, which include Semiconductor Manufacturing International, which was down -4.11%, and Hua Hong Semiconductor, which was down -5.41%. Internet stocks were also off, although there was no major news for the sector.
Non-ferrous metals stocks had a down day in both Hong Kong and Mainland China, as metals, mining, and precious metals names were all off. Chinese commodity futures were lower, with copper, aluminum, and lead down by 1%, while zinc, nickel, and tin also declined. Hong Kong and Mainland-listed energy stocks followed oil prices lower. Hong Kong and Mainland-listed insurance and brokerage stocks were hit with profit-taking following yesterday's jump on the CSRC’s announcement about allowing higher equity allocations.
Polysilicon futures, which jumped on the July solar anti-involution news, on the Guangzhou Futures Exchange increased by +3.45% overnight, which lifted Mainland-listed solar stocks like Sungrow, which gained +0.93%, and LONGi, which gained +0.66%.
Southbound Stock Connect volumes were light. Mainland investors drove only $68 million of net buying.
Premier Li Qiang spoke at the “1+10” Dialogue, which comprises the New Development Bank, World Bank, IMF, IWC, UN, OECD, and the Asian Infrastructure Investment Bank (AIIB). He touched on the 15th Five-Year Plan and China’s “steady growth over the past year”. The Vice Premier He Lifeng and his trade envoy met with Craig Allen of the Cohen Group. He stated that the leaders of the US and China have had “multiple phone calls and successful meetings in Busan, South Korea,” and he “welcomes more American companies to invest and do business in China, striving to promote the steady, healthy, and sustainable development of China-US economic and trade relations.”
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -1.3% |
| Hang Seng Tech | HSTECH Index | -1.9% |
| Hong Kong Turnover | HKTurn Index | 1.9% |
| Hong Kong Short Sale Turnover | HKSST Index | 19.4% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 17.4% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 67.78 |
| China (Shanghai) | SHCOMP Index | -0.4% |
| China (Shenzhen) | SZCOMP Index | -0.5% |
| China (STAR Board) | Star50 Index | -0.3% |
| Mainland Turnover | .chturn Index | -6.5% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | -0.6% |
| Japan | NKY Index | 0.1% |
| India | SENSEX Index | -0.5% |
| Indonesia | JCI Index | -0.6% |
| Malaysia | FBMKLCI Index | 0.1% |
| Pakistan | KSE100 Index | 0.4% |
| Philippines | PCOMP Index | 0.5% |
| South Korea | KOSPI Index | -0.3% |
| Taiwan | TWSE Index | -0.4% |
| Thailand | SET Index | 0.7% |
| Singapore | STI Index | 0.1% |
| Australia | AS51 Index | -0.4% |
| Vietnam | VNINDEX Index | -0.4% |
| Indicator | Hong Kong | Mainland |
|---|---|---|
| Today's Volume % of 1-Year Average | 85% | 113% |
| Advancing Stocks | 82 | 1260 |
| Declining Stocks | 414 | 3793 |
| Outperforming Factors | Value | Growth |
| Underperforming Factors | Growth, Large Caps | Value, Buyback, Quality |
| Top Sectors | Communication Services, Health Care, Consumer Staples | Information Technology, Utilities, Health Care |
| Bottom Sectors | Materials, Real Estate, Energy | Materials, Real Estate, Staples |
| Top Subsectors | REITs, Environmental Protection | Electronic Components, Office Supplies, Retail |
| Bottom Subsectors | Consumer Durables, Non Ferrous Metals, Building | Forest, Precious Metals, Base Metals |
| Southbound Connect Buys | Tencent (Large), Alibaba, Xiaomi (Moderate), Hua Hong Semiconductor (Small) | N/A |
| Southbound Connect Sells | Pop Mart (Moderate), SMIC (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | -1.48 |
| Communication Services | 11 | -0.81 |
| Consumer Discretionary | 28 | -1.61 |
| Consumer Staples | 13 | -1.08 |
| Energy | 6 | -2.34 |
| Financials | 25 | -1.13 |
| Health Care | 15 | -0.93 |
| Industrials | 21 | -1.43 |
| Information Technology | 12 | -2.24 |
| Materials | 10 | -4.46 |
| Real Estate | 7 | -3.99 |
| Utilities | 12 | -1.94 |
| Mainland China Listed | 386 | -0.29 |
| Communication Services | 8 | -0.49 |
| Consumer Discretionary | 28 | -0.92 |
| Consumer Staples | 21 | -1.1 |
| Energy | 12 | -1.03 |
| Financials | 66 | -0.48 |
| Health Care | 33 | -0.12 |
| Industrials | 57 | -0.9 |
| Information Technology | 91 | 1.9 |
| Materials | 49 | -2.39 |
| Real Estate | 6 | -2.23 |
| Utilities | 14 | 0.12 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -0.4 |
| Alibaba HK | 9988 HK Equity | -1.6 |
| JD.com HK | 9618 HK Equity | -1.1 |
| NetEase HK | 9999 HK Equity | -1.9 |
| Yum China HK | 9987 HK Equity | -1.3 |
| Baozun HK | 9991 HK Equity | -1.9 |
| Baidu HK | 9888 HK Equity | -3.5 |
| Autohome HK | 2518 HK Equity | 1.8 |
| Bilibili HK | 9626 HK Equity | -3.6 |
| Trip.com HK | 9961 HK Equity | -0.9 |
| EDU HK | 9901 HK Equity | 0.2 |
| Xpeng HK | 9868 HK Equity | -0.8 |
| Weibo HK | 9898 HK Equity | -2.8 |
| Li Auto HK | 2015 HK Equity | -2.8 |
| Nio Auto HK | 9866 HK Equity | -0.3 |
| Zhihu HK | 2390 HK Equity | 0.1 |
| KE HK | 2423 HK Equity | -4.8 |
| Tencent Music Entertainment HK | 1698 HK Equity | -0.5 |
| Meituan HK | 3690 HK Equity | -2.2 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | -1.6 |
| TENCENT | -0.4 |
| XIAOMI CORP-CLASS B | -3.1 |
| SEMICONDUCTOR MANUFACTURI-H | -4.1 |
| POP MART INTERNATIONAL GROUP | -5 |
| MEITUAN | -2.2 |
| PING AN INSURANCE GROUP CO-H | -1.6 |
| HUA HONG SEMICONDUCTOR LTD-H | -5.4 |
| CHINA CONSTRUCTION BANK-H | -0.7 |
| CHINA LIFE INSURANCE CO-H | -4.1 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | 6.3 |
| VICTORY GIANT TECHNOLOGY -A | 10.8 |
| EOPTOLINK TECHNOLOGY INC L-A | 3.6 |
| FOXCONN INDUSTRIAL INTERNET | 7.2 |
| SUZHOU TFC OPTICAL COMMUNI-A | 1.4 |
| ADDSINO CO LTD -A | 0.6 |
| CAMBRICON TECHNOLOGIES-A | 1.3 |
| SUNGROW POWER SUPPLY CO LT-A | 0.9 |
| SHANNON SEMICONDUCTOR TECH-A | 1.7 |
| ZHEJIANG SANHUA INTELLIGEN-A | -1.8 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.06 versus 7.07 yesterday
- CNY per EUR 8.22 versus 8.24 yesterday
- Yield on 10-Year Government Bond 1.84% versus 1.85% yesterday
- Yield on 10-Year China Development Bank Bond 1.93% versus 1.94% yesterday
- Copper Price -0.41%
- Steel Price -1.31%
