Asia Takes Broad AVGO Hit
5 Min. Read Time
Key News
Asian equities were largely lower on light volumes and a stronger dollar, as Broadcom’s (AVGO) revenue forecast miss triggered profit-taking in the AI "picks-and-shovels" trade. This led to declines in Taiwan, with TSMC down by -1.65%, Japan, with Softbank down by -11.28%, Korea, with SK Hynix down by -5.08% and Samsung down by -5.66%. Meanwhile, Hong Kong’s technology hardware stocks fell by -2.03%, based on our basket, and electrical equipment stocks were lower by -6.09%.
Geopolitical headlines likely did not help Hong Kong sentiment, as the OECD's statement on China's subsidies is ammunition for the European Union’s electric vehicle (EV) tariff threat, the US Department of Commerce’s proposed tariffs on “forced labor” countries, and global chip export controls. This narrative is not new. The likely culprit is China's tightening scrutiny of funds leaving the Mainland, as exemplified by regulatory action against online brokers last week.
Today, regulators' enforcement of capital controls was rumored to have spread to Mainland citizens opening insurance policies in Hong Kong. This drove Hong Kong-listed insurance giant AIA to fall 6.75%. Investors shot first, asking questions later. AIA announced after the close that it repurchased 8.3 million shares during last night's session. The downdraft highlights the fragile state of investor confidence in Hong Kong's market.
Hong Kong was a sea of red overnight. Index heavyweights were mostly lower, as Tencent fell -1.59%, Alibaba fell -2.45%, CATL fell -7.01%, and BYD fell -1.55%.
Pop Mart fell -1%, despite being widely respected and followed globally. Smartphone entrepreneur and Warren Buffett fan Duan Yongping filed as a shareholder of the toymaker.
Personal computer company ZTE gained +5.27% overnight after announcing a partnership with Tencent to develop computers pre-loaded with Tencent’s AI.
Autonomous driving and robotaxi providers WeRide and Pony AI fell by -6.13% and -3.18%, respectively, despite being added to Southbound Stock Connect.
It was interesting that Mainland investors were large buyers of Hong Kong-listed stocks and ETFs, though net buying was only $40 million. Mainland investors are likely to have taken profits from their holdings of Hong Kong-listed ETFs. However, the sales did not rank among the most heavily traded, according to publicly available information. Mainland China was off, though chips, semiconductor materials, technology equipment, and broad technology hardware all held up.
The Science & Technology (STAR) Board of the Shanghai Stock Exchange posted a small gain, offsetting small losses in the broader Shanghai and Shenzhen indexes.
CATL fell 4.27% in Mainland China, which appears to have borne the brunt of EU tariff concerns.
It was a fairly quiet night overall!
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -1.5% |
| Hang Seng Tech | HSTECH Index | -1.6% |
| Hong Kong Turnover | HKTurn Index | -16.3% |
| Hong Kong Short Sale Turnover | HKSST Index | -7.8% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 22.8% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | -40.22 |
| China (Shanghai) | SHCOMP Index | -0.6% |
| China (Shenzhen) | SZCOMP Index | -0.4% |
| China (STAR Board) | Star50 Index | 0.7% |
| Mainland Turnover | .chturn Index | -11.7% |
| Japan | NKY Index | -1.4% |
| India | SENSEX Index | 0% |
| Indonesia | JCI Index | -1.7% |
| Malaysia | FBMKLCI Index | 0.6% |
| Pakistan | KSE100 Index | 0.6% |
| Philippines | PCOMP Index | -0.7% |
| South Korea | KOSPI Index | -1.8% |
| Taiwan | TWSE Index | -1.7% |
| Thailand | SET Index | 0.4% |
| Singapore | STI Index | -1.4% |
| Australia | AS51 Index | -1.1% |
| Vietnam | VNINDEX Index | 0.7% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 101 | 128 |
| Advancing Stocks | 104 | 1,304 |
| Declining Stocks | 404 | 3,791 |
| Outperforming Factors | None | None |
| Underperforming Factors | Liquidity, EPS Revision, Momentum | EPS Revision, Value, Dividend Yield |
| Top Sectors | Financials, Energy, Real Estate | Information Technology, Energy, Consumer Discretionary |
| Bottom Sectors | Materials, Consumer Discretionary, Utilities | Materials, Communication Services, Industrials |
| Top Subsectors | Chemical Industry, Semiconductors, Machinery | Energy Equipment, Electronic Components, Semiconductors |
| Bottom Subsectors | Electrical Equipment, Non Ferrous Metals, Tech Hardware | Office Supplies, Precious Metals, Retail |
| Southbound Connect Buys | Alibaba, Gigadevice, Hua Hong Semi, Pop Mart, SMIC, Tencent, YOFC (Large) | N/A |
| Southbound Connect Sells | None | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | -1.37 |
| Communication Services | 11 | -1.42 |
| Consumer Discretionary | 28 | -1.87 |
| Consumer Staples | 13 | -1.23 |
| Energy | 6 | -0.66 |
| Financials | 25 | -0.44 |
| Health Care | 16 | -0.74 |
| Industrials | 22 | -1.09 |
| Information Technology | 12 | -1.35 |
| Materials | 14 | -3.88 |
| Real Estate | 7 | -0.7 |
| Utilities | 11 | -1.66 |
| Mainland China Listed | 386 | -0.69 |
| Communication Services | 8 | -1.83 |
| Consumer Discretionary | 26 | -1.04 |
| Consumer Staples | 19 | -1.51 |
| Energy | 12 | 1.04 |
| Financials | 64 | -1.14 |
| Health Care | 31 | -1.47 |
| Industrials | 58 | -1.75 |
| Information Technology | 95 | 1.07 |
| Materials | 52 | -2.83 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -1.6 |
| Alibaba HK | 9988 HK Equity | -2.4 |
| JD.com HK | 9618 HK Equity | -0.1 |
| NetEase HK | 9999 HK Equity | -0.5 |
| Yum China HK | 9987 HK Equity | -0.1 |
| Baozun HK | 9991 HK Equity | -0.3 |
| Baidu HK | 9888 HK Equity | -2.1 |
| Autohome HK | 2518 HK Equity | -1 |
| Bilibili HK | 9626 HK Equity | -1.4 |
| Trip.com HK | 9961 HK Equity | -0.8 |
| EDU HK | 9901 HK Equity | -0.9 |
| Xpeng HK | 9868 HK Equity | -2.4 |
| Weibo HK | 9898 HK Equity | -1.1 |
| Li Auto HK | 2015 HK Equity | -3.1 |
| Nio Auto HK | 9866 HK Equity | -3.7 |
| Zhihu HK | 2390 HK Equity | 8.4 |
| KE HK | 2423 HK Equity | -1.3 |
| Tencent Music Entertainment HK | 1698 HK Equity | -4.2 |
| Meituan HK | 3690 HK Equity | -2.2 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | -1.6 |
| SEMICONDUCTOR MANUFACTURI-H | 1.2 |
| ALIBABA GROUP HOLDING LTD | -2.4 |
| LENOVO GROUP LTD | -1.7 |
| HUA HONG SEMICONDUCTOR LTD-H | 2.6 |
| YANGTZE OPTICAL FIBRE AND-H | 10.7 |
| AIA GROUP LTD | 0.2 |
| CONTEMPORARY AMPEREX TECHN-H | -7 |
| MEITUAN-CLASS B | -2.2 |
| POP MART INTERNATIONAL GROUP | 0.1 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| GIGADEVICE SEMICONDUCTO-CL A | 3.7 |
| ZHONGJI INNOLIGHT CO LTD-A | 7 |
| HENGTONG OPTIC-ELECTRIC CO-A | 7 |
| FOXCONN INDUSTRIAL INTERNE-A | 1.3 |
| BOE TECHNOLOGY GROUP CO LT-A | 10 |
| SUZHOU DONGSHAN PRECISION-A | 6.2 |
| EOPTOLINK TECHNOLOGY INC L-A | 4.7 |
| BIWIN STORAGE TECHNOLOGY C-A | 8.7 |
| VICTORY GIANT TECHNOLOGY -A | 3.8 |
| JCET GROUP CO LTD-A | 6.3 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.77 versus 6.77 yesterday
- CNY per EUR 7.88 versus 7.86 yesterday
- Yield on 10-Year Government Bond 1.71% versus 1.71% yesterday
- Yield on 10-Year China Development Bank Bond 1.76% versus 1.76% yesterday
- Copper Price -1.15%
- Steel Price -0.28%
