Hong Kong & Mainland China Grind Higher As Bessent Packs His Bags
5 Min. Read Time
Key News
Asian equities delivered mixed performance overnight, as Vietnam outperformed on a trade deal, while Taiwan, South Korea, and Thailand all lagged amid the absence of new deals.
News broke that Treasury Secretary Scott Bessent will travel to Stockholm to meet his Chinese counterparts, a potential signal of further thawing in US-China geopolitical tensions. Investors are watching closely to see whether this latest move provides a lift to US-listed China stocks, following last week’s positive push when the Nvidia H20 export ban was lifted.
The market continues to anticipate a possible Trump-Xi summit. The delay of China tariff decisions is seen as a sign that talks are progressing. In Hong Kong, the Hang Seng Index finished just above 25,000, and the Hang Seng Tech Index closed a touch above 5,600, while both Shanghai and Shenzhen moved gradually higher over the session. Notably, Southbound Stock Connect flows accounted for 61% of Hong Kong market volume for a second straight day, suggesting subdued foreign participation.
Sector-wise, market moves closely mirrored yesterday’s action, as the new mega-dam project announcement continued to support building materials, machinery, and construction stocks listed in both Hong Kong and Mainland China. The coal sector once again drove a value-investing bias, with Shaanxi Coal Industry climbing +7.93% and Shanxi Coking Coal jumping +10.07%, as fresh price increases are expected this week.
Hong Kong-listed internet stocks produced mixed results: Tencent rose +0.86%, Alibaba edged up +0.08% despite its Qwen3 AI outperforming OpenAI and DeepSeek, Kuaishou gained +1.82%, and JD.com ended flat. Robotics maker UB Tech fell -5.71%, after issuing 30 million new shares at a 9% discount to the previous close, raising HKD 2.47 billion (about $315 million). Unitree Robotics is reportedly planning a Hong Kong listing in October.
Among automakers, the Hong Kong share classes of BYD and battery giant Contemporary Amperex Technology (CATL) advanced +5.09% and +2.34%, respectively, after BYD announced stronger local sales than Tesla.
Mainland China’s markets steadily climbed throughout the trading session. The energy sector led, as solar companies outperformed, including Sungrow, up +1.90%, Tongwei, up +5.55%, and LONGi Green Energy, up +1.59%. At the same time, futures on polysilicon, a key input material to solar panels, on the Guangzhou Futures Exchange continued their strong rebound, finishing up +5.98% for the day and +17.82% over the last 10 days. The recent rise in polysilicon prices has been supported by the government-led production cuts, which were initiated in early July. These measures brought silicon futures from a low of 6,982 to a close of 9,655.
There are signs that Central Huijin, the finance-focused branch of China’s sovereign wealth fund, was actively buying Mainland-listed equity exchange-traded funds (ETFs) based on mutual fund shareholder data as of the end of the second quarter. One major ETF reported that its largest shareholder, which is almost certainly Central Huijin, had increased its ownership by 10.874 billion shares, bringing its stake to 37.858 billion shares, or 40.26% of the fund. While an estimated $10 billion in ETF inflows is noteworthy, it is modest relative to Mainland China’s roughly $12 trillion free-float market capitalization, representing only a minor contribution even when spread across multiple funds.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.5% |
| Hang Seng Tech | HSTECH Index | 0.4% |
| Hong Kong Turnover | HKTurn Index | 1.2% |
| Hong Kong Short Sale Turnover | HKSST Index | 6.9% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 11.6% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 0 |
| China (Shanghai) | SHCOMP Index | 0.6% |
| China (Shenzhen) | SZCOMP Index | 0.6% |
| China (STAR Board) | Star50 Index | 0.8% |
| Mainland Turnover | .chturn Index | 11.4% |
| 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 | -0.1% |
| India | SENSEX Index | 0% |
| Indonesia | JCI Index | -0.7% |
| Malaysia | FBMKLCI Index | -0.3% |
| Pakistan | KSE100 Index | 0.9% |
| Philippines | PCOMP Index | 0% |
| South Korea | KOSPI Index | -1.3% |
| Taiwan | TWSE Index | -1.5% |
| Thailand | SET Index | -1.4% |
| Singapore | STI Index | 0% |
| Australia | AS51 Index | 0.1% |
| Vietnam | VNINDEX Index | 1.6% |
| Indicator | A | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 126% | 139% |
| Advancing Stocks | 285 | 2090 |
| Declining Stocks | 194 | 2905 |
| Outperforming Factors | Value, Dividends, Momentum | Value, Low Volatility, Dividend Yield |
| Underperforming Factors | Momentum | |
| Top Sectors | Materials, Energy, Industrials | Energy, Materials, Industrials |
| Bottom Sectors | Financials | Financials, Tech, Communication |
| Top Subsectors | Coal, Building, Non Ferrous Metals | Construction, Coal, Building Materials |
| Bottom Subsectors | Construction, Banks, Healthcare Equipment | Internet, Motorcycle, Leisure Products |
| Southbound Connect Buys | Meituan, SMIC (Moderate), Alibaba, Dongfang Electric, Huaxin Cement, Lonking (Small) | |
| Southbound Connect Sells | Guotai Junan, Tencent (Small) |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 152 | 0.58 |
| Communication Services | 9 | 0.82 |
| Consumer Discretionary | 28 | 0.45 |
| Consumer Staples | 13 | 0.28 |
| Energy | 6 | 2.57 |
| Financials | 24 | -0.23 |
| Health Care | 12 | 0.41 |
| Industrials | 21 | 1.96 |
| Information Technology | 10 | 0.13 |
| Materials | 10 | 3.4 |
| Real Estate | 7 | 1.02 |
| Utilities | 12 | 1.5 |
| Mainland China Listed | 395 | 0.92 |
| Communication Services | 7 | 0 |
| Consumer Discretionary | 29 | 0.66 |
| Consumer Staples | 24 | 2.02 |
| Energy | 13 | 4.21 |
| Financials | 64 | -0.56 |
| Health Care | 32 | 0.4 |
| Industrials | 61 | 2.32 |
| Information Technology | 90 | -0.01 |
| Materials | 54 | 2.87 |
| Real Estate | 6 | 1.47 |
| Utilities | 15 | 0.66 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 0.9 |
| Alibaba HK | 9988 HK Equity | 0.1 |
| JD.com HK | 9618 HK Equity | -0.3 |
| NetEase HK | 9999 HK Equity | 0.3 |
| Yum China HK | 9987 HK Equity | 0.9 |
| Baozun HK | 9991 HK Equity | 3.5 |
| Baidu HK | 9888 HK Equity | 1.4 |
| Autohome HK | 2518 HK Equity | -3.1 |
| Bilibili HK | 9626 HK Equity | -1.7 |
| Trip.com HK | 9961 HK Equity | 0 |
| EDU HK | 9901 HK Equity | -4.9 |
| Xpeng HK | 9868 HK Equity | 0 |
| Weibo HK | 9898 HK Equity | -0.4 |
| Li Auto HK | 2015 HK Equity | -1.8 |
| Nio Auto HK | 9866 HK Equity | 4.5 |
| Zhihu HK | 2390 HK Equity | 0.8 |
| KE HK | 2423 HK Equity | 0.7 |
| Tencent Music Entertainment HK | 1698 HK Equity | -0.7 |
| Meituan HK | 3690 HK Equity | -1.4 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | 0.9 |
| ALIBABA GROUP HOLDING LTD | 0.1 |
| MEITUAN-CLASS B | -1.4 |
| SEMICONDUCTOR MANUFACTURI-H | 2.8 |
| BYD CO LTD-H | 5.1 |
| DONGFANG ELECTRIC CORP LTD-H | -2.8 |
| XIAOMI CORP-CLASS B | 0.3 |
| CHINA CONSTRUCTION BANK-H | -1.2 |
| HUAXIN CEMENT CO LTD-H | -15.1 |
| CHINA LIFE INSURANCE CO-H | 4.2 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| SHANTUI CONSTRUCTION MACHI-A | 5.5 |
| VISUAL CHINA GROUP CO LTD-A | -1 |
| ZHONGJI INNOLIGHT CO LTD-A | -1.9 |
| EAST MONEY INFORMATION CO-A | 0.8 |
| CHINA NORTHERN RARE EARTH -A | -1.9 |
| EOPTOLINK TECHNOLOGY INC L-A | -0.9 |
| CONTEMPORARY AMPEREX TECHN-A | 2.5 |
| HUADIAN NEW ENERGY GROUP C-A | 2.2 |
| SANY HEAVY INDUSTRY CO LTD-A | 8.7 |
| VICTORY GIANT TECHNOLOGY -A | -3 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.17 versus 7.17 yesterday
- CNY per EUR 8.40 versus 8.35 yesterday
- Yield on 10-Year Government Bond 1.69% versus 1.68% yesterday
- Yield on 10-Year China Development Bank Bond 1.76% versus 1.74% yesterday
- Copper Price +0.49%
- Steel Price +1.78%
