Growth Stocks Lead Hong Kong & Mainland China Higher
5 Min. Read Time
Key News
Asian equities were largely higher overnight, led by Vietnam, Singapore, and the Hang Seng Tech Index, while Japan underperformed.
The Asia Dollar Index gained versus the US dollar, as CNY appreciated following last week’s weakness on Trump tariff concerns. The Hang Seng Index snapped a four-day losing streak as local investors recognized the importance of the National Development and Reform Commission’s (NDRC) anti-involution announcement aimed at Alibaba, JD.com, and Meituan for their instant commerce price war on Friday.
Alibaba’s Hong Kong share class appreciated 1.04% on Friday, while its US listing fell -2.95%! This was similar to the price action in JD.com, which fell -0.16% in Hong Kong on Friday, while its US listing fell -1.84%.
Growth stocks and subsectors led Hong Kong higher, including Tencent, which gained +2.80%, Xiaomi, which gained +2.15%, Kuaishou, which gained +3.22%. Meanwhile, reports that the Chinese government wants assurances from Nvidia that there is no “backdoor” on its H20 chips, leading Semiconductor Manufacturing International (SMIC) to gain +2.90% and Hua Hong Semiconductor to gain +8.69%. Alibaba was off -0.6%, though the ADR is rebounding, as it was at a -1.73% discount to the Hong Kong share class this morning. In addition to semiconductors, metal and mining stocks followed gold prices higher, while online entertainment continues to outperform, led by Kuaishou, Tencent Music Entertainment, which gained +8.70%, and Bilibili, which gained +1.45%.
Baidu gained +0.7%, though, after the close, it announced a Robotaxi partnership with Lyft in Europe, with services in Germany and the UK slated to launch in 2026.
It was a solid day in Hong Kong overall, as 81% of the Hang Seng Index constituents are above their 200-day moving averages, as the market took a healthy breather last week. Let’s see if the pullback turns previous resistance into support.
Southbound Stock Connect saw very large sells in the Hong Kong Tracker and Hang Seng China Enterprise ETFs, with $2.30 billion worth of outflow today, though Alibaba had a strong day of net buying. Mainland investors had bought a very healthy, abnormally large $10.56 billion worth of Hong Kong-listed stocks and ETFs from July 24th to last Friday.
Oil & gas names were mostly lower in both Hong Kong and Mainland China.
Mainland investors' appetite for stocks is increasing as evidenced by July’s new brokerage account openings, which increased 71% year-over-year (YoY) to 1.96 million, though the month-to-month data can be volatile based on market performance.
As in Hong Kong, growth stocks outperformed in Mainland trading, as the Shenzhen gained +0.78% and the STAR Board gained +1.22%, versus Shanghai, which gained +0.66%. There was some chatter of the National Team buying ETFs, though favored ETFs did not have above-average volume.
Over the weekend, the China Passenger Car Association (CPCA) announced July new energy vehicle (NEV), which includes EVs and hybrids, sales of 1.18 million, which is up +25% YoY, though down -4% from July. BYD led auto makers, with 341,030 units sold in July, followed by Geely’s 130,124 units, Changan’s 76,765 units, and Tesla’s 67,886 units, according to CnEVPost. Year-to-date (YTD) NEV sales are up +35% to 7.6 million YoY. Sounds good to me!
Last Night’s Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.9% |
| Hang Seng Tech | HSTECH Index | 1.6% |
| Hong Kong Turnover | HKTurn Index | -7.9% |
| Hong Kong Short Sale Turnover | HKSST Index | -4.5% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 16.4% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 10,560 |
| China (Shanghai) | SHCOMP Index | 0.7% |
| China (Shenzhen) | SZCOMP Index | 0.8% |
| China (STAR Board) | Star50 Index | 1.2% |
| Mainland Turnover | .chturn Index | -6.3% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | 0.2% |
| Japan | NKY Index | -1.2% |
| India | SENSEX Index | 0.5% |
| Indonesia | JCI Index | -1% |
| Malaysia | FBMKLCI Index | -0.4% |
| Pakistan | KSE100 Index | 0.6% |
| Philippines | PCOMP Index | 0.7% |
| South Korea | KOSPI Index | 0.9% |
| Taiwan | TWSE Index | -0.2% |
| Thailand | SET Index | 0.9% |
| Singapore | STI Index | 1% |
| Australia | AS51 Index | 0% |
| Vietnam | VNINDEX Index | 2.2% |
| Indicator | Hong Kong | Mainland |
|---|---|---|
| Today's Volume as % of 1-Year Average | 111 | 107 |
| Advancing Stocks | 336 | 3343 |
| Declining Stocks | 139 | 1534 |
| Outperforming Factors | Momentum, Buyback, Growth | Momentum, EPS Revisions, Growth |
| Underperforming Factors | Value | Value |
| Top Sectors | Materials, Communication, Tech | Communication, Materials, Financials |
| Bottom Sectors | Healthcare | |
| Top Subsectors | Semis, Defense, Coal | Precious Metals, Aerospace/Military, Soft Drink |
| Bottom Subsectors | Paper/Packaging, Telecom Services, Petroleum/Petrochemical | Education, Auto, Retail |
| Southbound Connect Buys | Alibaba (Moderate), Innoscience, SMIC, Tencent (Small) | N/A |
| Southbound Connect Sells | HK Tracker ETF (Massive), HS China Enterprise ETF (Very Large) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | 1.26 |
| Communication Services | 9 | 2.6 |
| Consumer Discretionary | 28 | 0.17 |
| Consumer Staples | 13 | 0.68 |
| Energy | 7 | 1.03 |
| Financials | 23 | 1.04 |
| Health Care | 13 | -0.11 |
| Industrials | 20 | 0.26 |
| Information Technology | 10 | 2.5 |
| Materials | 10 | 3.1 |
| Real Estate | 6 | 1.03 |
| Utilities | 12 | 0.58 |
| Mainland China Listed | 404 | 0.84 |
| Communication Services | 6 | 1.49 |
| Consumer Discretionary | 31 | 0.5 |
| Consumer Staples | 24 | 0.75 |
| Energy | 13 | 0.65 |
| Financials | 64 | 0.99 |
| Health Care | 31 | 0.24 |
| Industrials | 64 | 0.93 |
| Information Technology | 91 | 0.7 |
| Materials | 58 | 1.42 |
| Real Estate | 6 | 0.59 |
| Utilities | 16 | 0.77 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 2.8 |
| Alibaba HK | 9988 HK Equity | -0.6 |
| JD.com HK | 9618 HK Equity | 0.2 |
| NetEase HK | 9999 HK Equity | 2.2 |
| Yum China HK | 9987 HK Equity | 0.9 |
| Baozun HK | 9991 HK Equity | -3.9 |
| Baidu HK | 9888 HK Equity | 0.7 |
| Autohome HK | 2518 HK Equity | 4.9 |
| Bilibili HK | 9626 HK Equity | 1.4 |
| Trip.com HK | 9961 HK Equity | 0 |
| EDU HK | 9901 HK Equity | 6.5 |
| Xpeng HK | 9868 HK Equity | 2.8 |
| Weibo HK | 9898 HK Equity | 1.2 |
| Li Auto HK | 2015 HK Equity | 0.7 |
| Nio Auto HK | 9866 HK Equity | 1.1 |
| Zhihu HK | 2390 HK Equity | 0.1 |
| KE HK | 2423 HK Equity | 0.9 |
| Tencent Music Entertainment HK | 1698 HK Equity | 2.2 |
| Meituan HK | 3690 HK Equity | 0.7 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | 2.8 |
| ALIBABA GROUP HOLDING LTD | -0.6 |
| XIAOMI CORP-CLASS B | 2.2 |
| BYD CO LTD-H | -1.5 |
| INNOSCIENCE SUZHOU TECHNOL-H | 30.5 |
| MEITUAN-CLASS B | 0.7 |
| KUAISHOU TECHNOLOGY | 3.2 |
| SEMICONDUCTOR MANUFACTURI-H | 2.9 |
| HUA HONG SEMICONDUCTOR LTD-H | 8.7 |
| HONG KONG EXCHANGES & CLEAR | 1 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TIBET TIANLU CO LTD-A | -4 |
| ZHONGJI INNOLIGHT CO LTD-A | -1 |
| CONTEMPORARY AMPEREX TECHN-A | 1.3 |
| VICTORY GIANT TECHNOLOGY -A | -1.5 |
| EOPTOLINK TECHNOLOGY INC L-A | 0.8 |
| WUXI APPTEC CO LTD-A | -1.2 |
| CHINA NORTHERN RARE EARTH -A | 0.8 |
| DOSILICON CO LTD-A | 20 |
| ANHUI JIANGHUAI AUTO GROUP-A | -4.3 |
| EAST MONEY INFORMATION CO-A | 0.8 |
Last Night’s Exchange Rates, Prices, & Yields
- CNY per USD 7.18 versus 7.19 Friday
- CNY per EUR 8.32 versus 8.29 Friday
- Yield on 10-Year Government Bond 1.71% versus 1.71% Friday
- Yield on 10-Year China Development Bank Bond 1.79% versus 1.76% Friday
- Copper Price -0.06%
- Steel Price -0.75%
