Jensen Jawbones Optical Communications Stocks Higher
5 Min. Read Time
Key News
Asian equities were mixed as the US dollar strengthened against local currencies and Middle East tensions continued. Japan, Taiwan, and Mainland China’s Science & Technology (STAR) Board outperformed, while Indonesia and Hong Kong underperformed, and South Korea and Thailand were closed for Election Day and the Queen’s Birthday, respectively.
Nvidia CEO Jensen Huang’s positive comments on optical communications technology and custom chipmaker Marvell Technology, calling the company the world's next "trillion-dollar company", lifted supply chain beneficiaries, including Mainland-listed communication equipment and electronic equipment sub-sectors. Mainland-listed semiconductor stocks had a strong day as the STAR Board gained +2.11%. Hong Kong-listed electronic equipment and communication equipment makers also outperformed, led by optical play YOFC, which gained +10.65%. Also providing a tailwind to these sub-sectors was the release of the pro forma rebalance for FTSE indexes, including their China and China A (onshore) indices, which added several stocks from these sub-sectors. As in the US, these index changes can generate significant momentum for the stocks they add.
Tencent fell by -3.16%, but was Hong Kong’s most heavily traded stock by value, amid doubts about the timeline for WeChat’s AI integration. Mainland media noted Tencent’s participation in an upcoming AI conference in Beijing, which would be an ideal time to announce the AI launch. I could not ascertain whether they were referring to the upcoming 2026 International Conference on Artificial Intelligence and Industrial Internet, to be held in Beijing starting June 26th.
Profit-taking cut across internet stocks, as Alibaba fell -3.28% and Meituan fell -5.96%. Automobile and electric vehicle stocks fell, as well, as BYD closed lower by -3.62% following their two-day outperformance.
Mainland investors bought the dip in Hong Kong, including net buying of $2.38 billion, as the Hong Kong Tracker ETF saw a very large inflow of $961 million. Tencent and Alibaba were net buys as well. Without the highlighted sub-sectors, Mainland China had a weak day, especially in coal, oil, and gas stocks. It was a fairly quiet from a news perspective, as well.
The May RatingDog Services purchasing managers' index (PMI) came in at 54.4 versus April’s 52.6 and expectations of 52.3, though it was a non-factor in last night's market action and hardly mentioned, despite the outperformance.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -1.6% |
| Hang Seng Tech | HSTECH Index | -2.7% |
| Hong Kong Turnover | HKTurn Index | -13.6% |
| Hong Kong Short Sale Turnover | HKSST Index | -9.1% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 20.7% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 2,385.95 |
| China (Shanghai) | SHCOMP Index | 0.2% |
| China (Shenzhen) | SZCOMP Index | 0.3% |
| China (STAR Board) | Star50 Index | 2.1% |
| Mainland Turnover | .chturn Index | 11.8% |
| Japan | NKY Index | 2.5% |
| India | SENSEX Index | -0.4% |
| Indonesia | JCI Index | -4.1% |
| Malaysia | FBMKLCI Index | -0.6% |
| Pakistan | KSE100 Index | -0.6% |
| Philippines | PCOMP Index | 0.7% |
| South Korea | KOSPI Index | 0.1% |
| Taiwan | TWSE Index | 2% |
| Thailand | SET Index | 1.3% |
| Singapore | STI Index | 0.8% |
| Australia | AS51 Index | 0.7% |
| Vietnam | VNINDEX Index | -0.4% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 121% | 140% |
| Advancing Stocks | 124 | 1910 |
| Declining Stocks | 385 | 3149 |
| Outperforming Factors | Liquidity, Momentum, EPS Revision | |
| Underperforming Factors | Growth, Liquidity, EPS Revision | Dividend Yield, Buyback, Value |
| Top Sectors | Utilities, Energy | Tech, Energy, Materials |
| Bottom Sectors | Discretionary, Healthcare, Communication | Healthcare, Real Estate, Staples |
| Top Subsectors | Semis, Coal, Tech hardware | Communication Equipment, Semis, Coal |
| Bottom Subsectors | Consumer Staples Distribution, Consumer Discretionary Distribution, Media/Entertainment | Education, Marine, Airport |
| Southbound Connect Buys | HK Tracker ETF (Very Large), HS Tech ETF, HS China Enterprise ETF, SMIC, Tencent (Large), Alibaba, Hua Hong Semi (Moderate) | N/A |
| Southbound Connect Sells | YOFC (Moderate), Pop Mart (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 164 | -2.08 |
| Communication Services | 11 | -2.9 |
| Consumer Discretionary | 28 | -3.3 |
| Consumer Staples | 12 | -1.38 |
| Energy | 6 | 0.11 |
| Financials | 25 | -1.06 |
| Health Care | 16 | -3.23 |
| Industrials | 19 | -0.26 |
| Information Technology | 15 | -0.92 |
| Materials | 14 | -0.14 |
| Real Estate | 1 | -1.4 |
| Utilities | 6 | 0.15 |
| Mainland China Listed | 11 | 0.35 |
| Communication Services | 11 | -1.1 |
| Consumer Discretionary | 26 | -1.4 |
| Consumer Staples | 18 | -1.76 |
| Energy | 11 | 1.17 |
| Financials | 64 | -0.83 |
| Health Care | 29 | -2.03 |
| Industrials | 60 | -0.89 |
| Information Technology | 113 | 2.83 |
| Materials | 58 | -0.11 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -3.2 |
| Alibaba HK | 9988 HK Equity | -3.3 |
| JD.com HK | 9618 HK Equity | -4.2 |
| NetEase HK | 9999 HK Equity | -1.3 |
| Yum China HK | 9987 HK Equity | -2.7 |
| Baozun HK | 9991 HK Equity | -0.9 |
| Baidu HK | 9888 HK Equity | -1.3 |
| Autohome HK | 2518 HK Equity | 1.4 |
| Bilibili HK | 9626 HK Equity | -3.9 |
| Trip.com HK | 9961 HK Equity | -3 |
| EDU HK | 9901 HK Equity | -3.4 |
| Xpeng HK | 9868 HK Equity | -5.5 |
| Weibo HK | 9898 HK Equity | -2.7 |
| Li Auto HK | 2015 HK Equity | -4.5 |
| Nio Auto HK | 9866 HK Equity | -3.4 |
| Zhihu HK | 2390 HK Equity | -7.1 |
| KE HK | 2423 HK Equity | -2.7 |
| Tencent Music Entertainment HK | 1698 HK Equity | -3.2 |
| Meituan HK | 3690 HK Equity | -6 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | -3.2 |
| ALIBABA GROUP HOLDING LTD | -3.3 |
| SEMICONDUCTOR MANUFACTURI-H | 1.2 |
| YANGTZE OPTICAL FIBRE AND-H | 10.7 |
| LENOVO GROUP LTD | -1.7 |
| MEITUAN-CLASS B | -6 |
| HUA HONG SEMICONDUCTOR LTD-H | 2.6 |
| XIAOMI CORP-CLASS B | -3.5 |
| POP MART INTERNATIONAL GROUP | 0.1 |
| AIA GROUP LTD | 0.2 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| VISUAL CHINA GROUP CO LTD-A | -1.2 |
| SHANTUI CONSTRUCTION MACHI-A | -1.5 |
| ZHONGJI INNOLIGHT CO LTD-A | 7 |
| EOPTOLINK TECHNOLOGY INC L-A | 4.7 |
| FOXCONN INDUSTRIAL INTERNE-A | 1.3 |
| SUZHOU TFC OPTICAL COMMUNI-A | 8.8 |
| GIGADEVICE SEMICONDUCTO-CL A | 3.7 |
| SUZHOU DONGSHAN PRECISION-A | 6.2 |
| JCET GROUP CO LTD-A | 6.3 |
| MONTAGE TECHNOLOGY CO LTD-A | 7.1 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.77 versus 6.76 yesterday
- CNY per EUR 7.86 versus 7.87 yesterday
- Yield on 10-Year Government Bond 1.71% versus 1.70% yesterday
- Yield on 10-Year China Development Bank Bond 1.76% versus 1.76% yesterday
- Copper Price +0.83%
- Steel Price -0.06%
