Markets Lower On Profit-Taking Despite Ongoing US Visit
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Key News
Asian equities were mixed overnight as Taiwan and Indonesia outperformed, while the Philippines and Hong Kong's Hang Seng Tech Index underperformed.
China's stock markets were lower overnight despite significant positive developments on the geopolitical front. A "bipartisan delegation" led by democrat Rep. Adam Smith, who also serves on the House Armed Services Committee, has met with Vice Premier He Lifeng and Defense Minister Dong Jun. Smith and his team have pointed out that they would like to improve transparency and communication between the two countries, especially restoring military-to-military communication lines, which have been lessened since Nancy Pelosi's visit to Taiwan. This is the first type of visit from the US since 2019! 2019! There was also chatter that ongoing visits could result in China purchasing up to 500 Boeing jets. 500!
Internet names were mixed as there was some talk of new E-Commerce rules stemming from the continuing anti-involution campaign against over-competition and price wars, especially in instant commerce, though it does not appear to be that consequential. Baidu was lower on profit-taking, Alibaba was higher, and JD was weak.
Recent technology winners saw profit taking, especially Cambricon, which some call the "Nvidia of China." China's STAR Board has been on a decent run, so it was overdue for some profit-taking. Value sectors outperformed in both Hong Kong and Mainland China.
Warren Buffet's Berkshire Hathaway sold its entire stake in BYD after 20 years. Their returns must have been stellar, at least 20 times. BYD has come a very long way. In Korea, they run ads for BYDs, despite the country being a vehicle manufacturing powerhouse. Their cars are absolutely everywhere.
We are approaching the Golden Week holiday, so we should be on the look out for some data on tourism and consumption in China. Many Macau casinos are reporting that they are sold out for multiple days during the holiday, which spans from October 1st to October 8th.
Mainland investors were net sellers of Hong Kong-listed stocks via Southbound Stock Connect for the first time in a week. Nonetheless, Mainland investors have still purchased a net $142 billion worth of Hong Kong-listed stocks and ETFs so far this year compared to 2024's total of only $103 billion, and it is only September!
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -0.7% |
| Hang Seng Tech | HSTECH Index | -1.5% |
| Hong Kong Turnover | HKTurn Index | 1.4% |
| Hong Kong Short Sale Turnover | HKSST Index | -19.5% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 14% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | -519.65 |
| China (Shanghai) | SHCOMP Index | -0.2% |
| China (Shenzhen) | SZCOMP Index | -0.8% |
| China (STAR Board) | Star50 Index | -0.1% |
| Mainland Turnover | .chturn Index | 17.4% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | 0.3% |
| Japan | NKY Index | Closed |
| India | SENSEX Index | -0.1% |
| Indonesia | JCI Index | 1.1% |
| Malaysia | FBMKLCI Index | 0% |
| Pakistan | KSE100 Index | 0.2% |
| Philippines | PCOMP Index | -1.5% |
| South Korea | KOSPI Index | 0.5% |
| Taiwan | TWSE Index | 1.4% |
| Thailand | SET Index | -0.7% |
| Singapore | STI Index | 0.1% |
| Australia | AS51 Index | 0.4% |
| Vietnam | VNINDEX Index | 0% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume as % of 1-Year Average | 121 | 190 |
| Advancing Stocks | 18 (Hang Seng) | 119 (CSI 300) |
| Declining Stocks | 67 (Hang Seng) | 178 (CSI 300) |
| Outperforming Factors | Value | Value |
| Underperforming Factors | Growth | Growth |
| Top Sectors | Utilities, Financials, Materials | Utilities, Energy, Industrials |
| Bottom Sectors | Real Estate, Consumer Staples, Health Care | Health Care, Consumer Discretionary, Communication Services |
| Top Subsectors | Conglomerates, Machinery, Banks | Banks, Precious Metals, Power Generation |
| Bottom Subsectors | Steel, Autos, Technology Hardware | Tourism, Education, Biotechnology |
| Southbound Connect Buys | Alibaba, Semiconductor Manufacturing (SMIC), Akeso | N/A |
| Southbound Connect Sells | Pop Mart, Hua Hong Semiconductor, Tencent | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | -1.01 |
| Communication Services | 9 | -1.02 |
| Consumer Discretionary | 28 | -1.16 |
| Consumer Staples | 13 | -2.07 |
| Energy | 7 | -0.32 |
| Financials | 23 | -0.16 |
| Health Care | 13 | -1.78 |
| Industrials | 20 | -0.73 |
| Information Technology | 10 | -1.72 |
| Materials | 10 | -0.31 |
| Real Estate | 6 | -2.44 |
| Utilities | 12 | 0.03 |
| Mainland China Listed | 404 | -0.15 |
| Communication Services | 6 | -0.84 |
| Consumer Discretionary | 31 | -1.26 |
| Consumer Staples | 24 | -0.45 |
| Energy | 13 | 0.76 |
| Financials | 64 | 0.31 |
| Health Care | 31 | -1.47 |
| Industrials | 64 | 0.41 |
| Information Technology | 91 | -0.19 |
| Materials | 58 | -0.64 |
| Real Estate | 6 | 0.04 |
| Utilities | 16 | 0.83 |
| 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 | -4.4 |
| NetEase HK | 9999 HK Equity | 1.4 |
| Yum China HK | 9987 HK Equity | -1.2 |
| Baozun HK | 9991 HK Equity | 6.6 |
| Baidu HK | 9888 HK Equity | -5.4 |
| Autohome HK | 2518 HK Equity | 1.2 |
| Bilibili HK | 9626 HK Equity | -2.8 |
| Trip.com HK | 9961 HK Equity | -0.3 |
| EDU HK | 9901 HK Equity | 1.9 |
| Xpeng HK | 9868 HK Equity | 0.8 |
| Weibo HK | 9898 HK Equity | -1.5 |
| Li Auto HK | 2015 HK Equity | -2.4 |
| Nio Auto HK | 9866 HK Equity | -5.9 |
| Zhihu HK | 2390 HK Equity | 2.1 |
| KE HK | 2423 HK Equity | -3.1 |
| Tencent Music Entertainment HK | 1698 HK Equity | -1.7 |
| Meituan HK | 3690 HK Equity | -2.8 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | 0.1 |
| SEMICONDUCTOR MANUFACTURI-H | -1 |
| TENCENT HOLDINGS LTD | -0.9 |
| SHANDONG HI-SPEED HOLDINGS | 22.2 |
| MEITUAN-CLASS B | -2.8 |
| BAIDU INC-CLASS A | -5.4 |
| XIAOMI CORP-CLASS B | -1.2 |
| BYD CO LTD-H | -3.1 |
| POP MART INTERNATIONAL GROUP | -1.3 |
| JD.COM INC-CLASS A | -4.4 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| LUXSHARE PRECISION INDUSTR-A | 7.8 |
| ZHONGJI INNOLIGHT CO LTD-A | 3.9 |
| VICTORY GIANT TECHNOLOGY -A | -0.4 |
| EOPTOLINK TECHNOLOGY INC L-A | 2.9 |
| FOXCONN INDUSTRIAL INTERNE-A | 0.5 |
| SEMICONDUCTOR MANUFACTURIN-A | -0.3 |
| CAMBRICON TECHNOLOGIES-A | -3.4 |
| SUNGROW POWER SUPPLY CO LT-A | 4.6 |
| ZHEJIANG SANHUA INTELLIGEN-A | 4.8 |
| EAST MONEY INFORMATION CO-A | -2.9 |
Last Night’s Exchange Rates, Prices, & Yields
- CNY per USD 7.11 versus 7.11 yesterday
- CNY per EUR 8.39 versus 8.39 yesterday
- Yield on 10-Year Government Bond 1.88% versus 1.86% yesterday
- Yield on 10-Year China Development Bank Bond 1.95% versus 1.93% yesterday
- Copper Price 0.15%
- Steel Price -0.35%
