Asia Markets Rally On Wall Street Highs, Hormuz Truce Talks
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Key News
Asian equities were largely higher overnight, as South Korea, Japan, Mainland China, Hong Kong, and Taiwan outperformed.
Both Hong Kong and Mainland China started off slightly lower despite Wall Street hitting fresh record highs, as talks of an interim deal focused on the Strait of Hormuz gained traction. However, markets rebounded and had a strong day, with good breadth and more advancers than decliners.
The Hang Seng Tech Index was up +1% overnight, led by internet giants, including Alibaba (+1.8%), Tencent (+0.9%), which released its next-generation voice recognition model, JD.com (+0.7%), and Baozun (+5.2%). Alibaba saw slight net buying via the Southbound Stock Connect as well, while Tencent was a large net sell. Mainland investors were slight sellers of Hong Kong-listed stocks and ETFs overall, with a net sell of -$178 million. Growth stocks ruled the day in Hong Kong, while value stocks underperformed. Top subsectors included non-ferrous metals, semiconductors, and industrial machinery, while bottom subsectors included petroleum, banks, and utilities.
In Mainland China, Shanghai gained +1.5%, and Shenzhen closed higher by +2.1%, while China's Science and Technology (STAR) Board ripped higher by 4.8%. The STAR Board's newcomer CXMT was down -1.3% overnight after reports that the company is preparing to manufacture sixth-generation low-power Synchronous Dynamic Random Access Memory (DDR) chips by year-end, positioning it in direct competition with Micron, SK Hynix, and Samsung.
Similar to Hong Kong, Mainland China's technology and material sectors outperformed, while energy, communications, and financials underperformed. Top subsectors included precious metals, semiconductors, and electronic components, while bottom subsectors included oil and gas, communication equipment, and liquor.
In Hong Kong, Zhongji Innolight, the world's largest producer of optical transceivers, fell by about -5% on reports that the Federal Communications Commission (FCC), the U.S. regulator that oversees telecommunications and certain connected hardware and infrastructure, is drafting a ban on imports of Chinese data-center optical transceivers, though the stock recovered from steeper intraday losses.
Pharmaceutical stocks had a strong day in Hong Kong after Innovent Biologics (+4.2%) reported that 1st-half product sales grew +55% year-over-year, which was seemingly well received, given prior investor concern about the impact of anti-corruption measures on pharmaceutical results.
There was chatter overnight that MSCI China A 50 Connect Index constituent, Victory Giant (+16%), which manufactures high-precision printed circuit boards (PCBs) and high-density interconnect (HDI) boards used in AI servers, data centers, communications, and automotive electronics, could potentially have additional orders from its existing customer, Nvidia.
Overnight, Chinese media outlets continued to highlight China’s large-model invocation volume, which is basically a usage metric, topping global rankings and aggressive price competition from models like Moonshot AI's Kimi K3, signaling ongoing competition.
China’s Commerce Ministry said it will implement countermeasures in response to the widening U.S. restrictions on Chinese technology, which now include stricter limits on drone exports. The ministry characterized its response as relatively moderate and called on Washington to withdraw the curbs and resume talks to address their disagreements.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.2% |
| Hang Seng Tech | HSTECH Index | 1% |
| Hong Kong Turnover | HKTurn Index | 7.8% |
| Hong Kong Short Sale Turnover | HKSST Index | -20.9% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 0.2 |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | -178.52 |
| China (Shanghai) | SHCOMP Index | 1.5% |
| China (Shenzhen) | SZCOMP Index | 2.1% |
| China (STAR Board) | Star50 Index | 4.8% |
| Mainland Turnover | .chturn Index | 20.2% |
| Japan | NKY Index | 3.7% |
| India | SENSEX Index | 0.2% |
| Indonesia | JCI Index | 0.5% |
| Malaysia | FBMKLCI Index | 0.9% |
| Pakistan | KSE100 Index | 1.6% |
| Philippines | PCOMP Index | -0.2% |
| South Korea | KOSPI Index | 3.8% |
| Taiwan | TWSE Index | 2.9% |
| Thailand | SET Index | -0.5% |
| Singapore | STI Index | -0.6% |
| Australia | AS51 Index | 0.9% |
| Vietnam | VNINDEX Index | -0.0005 |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 101% | 107% |
| Advancing Stocks | 47 | 160 |
| Declining Stocks | 44 | 131 |
| Outperforming Factors | Growth | Growth |
| Underperforming Factors | Value | Value |
| Top Sectors | Materials, Technology | Materials, Technology |
| Bottom Sectors | Energy, Financials, Utilities | Energy, Communications, Financials |
| Top Subsectors | Non Ferrous Metals, Semiconductors, Machinery | Precious Metals, Semiconductors, Electronic, Components |
| Bottom Subsectors | Petroleum, Banks, Utilities | Oil & Gas, Communication Equipment, Liquor |
| Southbound Connect Buys | SMIC, Z.AI, Alibaba | N/A |
| Southbound Connect Sells | Tencent, CNOOC, Meituan | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | 0.89 |
| Communication Services | 11 | 0.72 |
| Consumer Discretionary | 28 | 1.12 |
| Consumer Staples | 13 | -0.84 |
| Energy | 6 | -0.57 |
| Financials | 25 | -0.33 |
| Health Care | 16 | 1.48 |
| Industrials | 22 | 1.16 |
| Information Technology | 12 | 2.06 |
| Materials | 14 | 6.51 |
| Real Estate | 7 | -0.39 |
| Utilities | 11 | -0.49 |
| Mainland China Listed | 386 | 1.61 |
| Communication Services | 8 | -0.18 |
| Consumer Discretionary | 26 | 0.01 |
| Consumer Staples | 19 | -1.29 |
| Energy | 12 | 0.99 |
| Financials | 64 | -0.45 |
| Health Care | 31 | 0.71 |
| Industrials | 58 | 1.31 |
| Information Technology | 95 | 3.72 |
| Materials | 52 | 4.04 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 0.9 |
| Alibaba HK | 9988 HK Equity | 1.8 |
| JD.com HK | 9618 HK Equity | 0.7 |
| NetEase HK | 9999 HK Equity | -1.5 |
| Yum China HK | 9987 HK Equity | -0.5 |
| Baozun HK | 9991 HK Equity | 5.2 |
| Baidu HK | 9888 HK Equity | 1.6 |
| Autohome HK | 2518 HK Equity | 0 |
| Bilibili HK | 9626 HK Equity | 0.3 |
| Trip.com HK | 9961 HK Equity | 0.5 |
| EDU HK | 9901 HK Equity | -2.4 |
| Xpeng HK | 9868 HK Equity | 0.5 |
| Weibo HK | 9898 HK Equity | -0.6 |
| Li Auto HK | 2015 HK Equity | 0.4 |
| Nio Auto HK | 9866 HK Equity | 0.4 |
| Zhihu HK | 2390 HK Equity | 0.9 |
| KE HK | 2423 HK Equity | -0.4 |
| Tencent Music Entertainment HK | 1698 HK Equity | -0.4 |
| Meituan HK | 3690 HK Equity | 0.4 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | 0.9 |
| ALIBABA GROUP HOLDING LTD | 1.8 |
| KINGBOARD LAMINATES HLDG LTD | 10.3 |
| YANGTZE OPTICAL FIBRE AND-H | 14.6 |
| SEMICONDUCTOR MANUFACTURI-H | 4.1 |
| Z AI CO LTD | 3.1 |
| HUA HONG GRACE SEMICONDUCTOR | 4.7 |
| ZHONGJI INNOLIGHT CO LTD-H | -5.2 |
| GIGADEVICE SEMICONDUCTOR I-H | 5.7 |
| XIAOMI CORP-CLASS B | -1.1 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| VISUAL CHINA GROUP CO LTD-A | 0.6 |
| SHANTUI CONSTRUCTION MACHI-A | 1 |
| ZHONGJI INNOLIGHT CO LTD-A | -7.3 |
| EOPTOLINK TECHNOLOGY INC L-A | -5.3 |
| CXMT CORP-A | -1.3 |
| GIGADEVICE SEMICONDUCTO-CL A | 8.3 |
| SUZHOU DONGSHAN PRECISION-A | 5.4 |
| CAMBRICON TECHNOLOGIES-A | 5.4 |
| WUXI APPTEC CO LTD-A | 4.4 |
| FOXCONN INDUSTRIAL INTERNE-A | 10 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.75 versus 6.75 yesterday
- CNY per EUR 7.80 versus 7.78 yesterday
- Copper Price +1.42%
- Steel Price -0.17%
