Semiconductor Stocks Sell Off As Alibaba Buys Nvidia Chips
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Key News
Asian equities were mixed as Japan played catch-up to the upside and Mainland China was hit with profit-taking.
The Shanghai Composite’s seventeen-day winning streak came to an end, though turnover in Mainland China hit another all-time high. Growth stocks, including tech hardware, electrical equipment, and semiconductors, were all kicked to the curb as President Trump’s 25% Iran tariff sparked profit-taking, with the STAR Board off by -2.4%. With the US stock market at all-time highs, I suppose we should anticipate the President increasing threats, though we can assume we’ll get the TACO (Trump Always Chickens Out), especially with tariffs that would raise inflation on US households.
Reports that Alibaba (+3.63%) will be buying Nvidia chips may have weighed on local chip makers, in addition to the IPO of memory chip maker GigaDevice Semiconductor, which gained +37.53% after raising $600 million, with retail investors oversubscribing by 542 times.
Mainland China was led by value stocks such as banks, oil/gas, and insurance, while non-ferrous metals maintained their relentless rise. The National Team’s favored ETFs had above-average volume, though it's hard to know if intervention occurred. Solar stocks were weak, with Longi down -3.8% and Sungrow down -1.82%, after it was announced that tariffs on US and South Korean silicon would be extended for another five years.
Healthcare stocks had a strong day, with Wuxi AppTec gaining +8.3% in Hong Kong and +6% in Mainland China after announcing preliminary fiscal year results. The company reported a net income increase of +103% to RMB 19.2B on revenue of RMB 45.5B, surpassing expectations of RMB 44.5B. JP Morgan’s Healthcare Conference kicked off yesterday, likely giving the sector a boost as a sign of how economically interdependent the world is.
Similar to Mainland China, healthcare, banks, oil/gas, insurance, and non-ferrous metal stocks outperformed, along with EV/auto, on the potential EU trade truce. Internet stocks were mixed, with Alibaba +3.63% on very high volumes, but not as much as its US ADR’s +10.17% return yesterday, as Hong Kong’s strong start faded across the trading day. Similar to Tencent, up +0.72%, also on high volume, though its unsponsored ADR gained +4.38% yesterday.
Yesterday’s internet rally was sparked by Friday’s report of a crackdown on the restaurant delivery war, although JD.com (+0.43%) and Meituan (-0.1%) were basically flat. The Ministry of Industry and Information Technology (MIIT) announced the "Action Plan for High-quality Development of Industrial Internet Platforms 2026-2028," which focuses on implementing AI via internet companies into industrial companies. MIIT also held a conference for manufacturing companies. Mainland investors purchased $166 million worth of Hong Kong stocks through the Southbound Stock Connect, with notable net buys from Alibaba and Tencent. Fairly quiet otherwise!
Yesterday I made the mistake of calling Justin Trudeau the PM of Canada when in fact he has been replaced by Mark Carney. In my defense, the Mainland media article noting Canada’s PM visiting China referenced Trudeau, though I regurgitated the error. I recently saw a photo of Trudeau with his new girlfriend Katy Perry, though I somehow didn’t make the connection that the pop star is, in fact, not the First Lady of Canada. I could blame my teenage daughter for imparting this useless information to me, though the culprit is likely the New York Post. My bad/apologies, and thanks to Satish for pointing out my error.
The December trade data is being released today.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.9% |
| Hang Seng Tech | HSTECH Index | 0.1% |
| Hong Kong Turnover | HKTurn Index | 2.9% |
| Hong Kong Short Sale Turnover | HKSST Index | -0.3% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 13.5% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 165.57 |
| China (Shanghai) | SHCOMP Index | -0.6% |
| China (Shenzhen) | SZCOMP Index | -1.4% |
| China (STAR Board) | Star50 Index | -2.8% |
| Mainland Turnover | .chturn Index | 1.4% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | -1.3% |
| Japan | NKY Index | 3.1% |
| India | SENSEX Index | -0.3% |
| Indonesia | JCI Index | 0.7% |
| Malaysia | FBMKLCI Index | 0.8% |
| Pakistan | KSE100 Index | 0.9% |
| Philippines | PCOMP Index | -0.2% |
| South Korea | KOSPI Index | 1.5% |
| Taiwan | TWSE Index | 0.5% |
| Thailand | SET Index | -0.6% |
| Singapore | STI Index | 0.8% |
| Australia | AS51 Index | 0.6% |
| Vietnam | VNINDEX Index | 1.4% |
| Indicator | Hong Kong | Mainland |
|---|---|---|
| Today's Volume % of 1-Year Average | 124% | 208% |
| Advancing Stocks | 299 | 1500 |
| Declining Stocks | 179 | 3539 |
| Outperforming Factors | EPS Revisions, Momentum, Large Caps | Value, Dividend Yield, Short Interest |
| Underperforming Factors | Liquidity, Growth, Quality | |
| Top Sectors | Materials, Healthcare, Discretionary | Healthcare, Materials, Energy |
| Bottom Sectors | Tech, Real Estate, Staples | Tech, Communications, Discretionary |
| Top Subsectors | Pharmaceuticals, Consumer Discretionary Distribution, Non Ferrous Metal | Biotech, Precious Metals, Energy Equipment |
| Bottom Subsectors | Consumer Durables/Apparel, Tech Hardware, Household Appliances | Aerospace/military, Chemical Fiber, Communication Equipment |
| Southbound Connect Buys | Alibaba, Tencent (Large), Xiaomi (Moderate) Goldwind, Kuaishou (Tiny) | |
| Southbound Connect Sells | SMIC (Moderate), XtalPI (Small) |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | 0.98 |
| Communication Services | 11 | 0.3 |
| Consumer Discretionary | 28 | 1.87 |
| Consumer Staples | 13 | -0.41 |
| Energy | 6 | 0.97 |
| Financials | 25 | 1.27 |
| Health Care | 15 | 1.94 |
| Industrials | 21 | 0.41 |
| Information Technology | 12 | -1.27 |
| Materials | 10 | 2.03 |
| Real Estate | 7 | -0.63 |
| Utilities | 12 | 0.45 |
| Mainland China Listed | 386 | -0.74 |
| Communication Services | 8 | -1.72 |
| Consumer Discretionary | 28 | -1.36 |
| Consumer Staples | 21 | -0.94 |
| Energy | 12 | 0.71 |
| Financials | 66 | 0.3 |
| Health Care | 33 | 0.94 |
| Industrials | 57 | -0.59 |
| Information Technology | 91 | -2.97 |
| Materials | 49 | 0.88 |
| Real Estate | 6 | -1.31 |
| Utilities | 14 | -0.25 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 0.7 |
| Alibaba HK | 9988 HK Equity | 3.6 |
| JD.com HK | 9618 HK Equity | 0.4 |
| NetEase HK | 9999 HK Equity | -0.2 |
| Yum China HK | 9987 HK Equity | 0.4 |
| Baozun HK | 9991 HK Equity | 4.6 |
| Baidu HK | 9888 HK Equity | -1.6 |
| Autohome HK | 2518 HK Equity | 4.1 |
| Bilibili HK | 9626 HK Equity | 3.1 |
| Trip.com HK | 9961 HK Equity | 0.3 |
| EDU HK | 9901 HK Equity | -1.5 |
| Xpeng HK | 9868 HK Equity | 2.2 |
| Weibo HK | 9898 HK Equity | 1.2 |
| Li Auto HK | 2015 HK Equity | 0 |
| Nio Auto HK | 9866 HK Equity | 0.4 |
| Zhihu HK | 2390 HK Equity | 12.1 |
| KE HK | 2423 HK Equity | 0.2 |
| Tencent Music Entertainment HK | 1698 HK Equity | 0.2 |
| Meituan HK | 3690 HK Equity | -0.1 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | 3.6 |
| TENCENT HOLDINGS LTD | 0.7 |
| XIAOMI CORP-CLASS B | -2 |
| MEITUAN-CLASS B | -0.1 |
| SEMICONDUCTOR MANUFACTURI-H | -1.1 |
| KUAISHOU TECHNOLOGY | -2.2 |
| BYD CO LTD-H | 1.6 |
| SENSETIME GROUP INC-CLASS B | -4.9 |
| PING AN INSURANCE GROUP CO-H | 2.2 |
| POP MART INTERNATIONAL GROUP | -2.9 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| GOLDWIND SCIENCE & TECHNOL-A | -3.4 |
| BLUEFOCUS INTELLIGENT COMM-A | 1.1 |
| SHANGHAI STONEHILL TECHNOL-A | 5.3 |
| CHINA SPACESAT CO LTD -A | 4.2 |
| CHINA AEROSPACE TIMES ELEC-A | -10 |
| ZHONGJI INNOLIGHT CO LTD-A | -1 |
| KUNLUN TECH CO LTD-A | -3.2 |
| ZHEJIANG SANHUA INTELLIGEN-A | 0.3 |
| SHENZHEN SUNWAY COMMUNICAT-A | -10.8 |
| EOPTOLINK TECHNOLOGY INC L-A | -2.1 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.97 versus 6.97 yesterday
- CNY per EUR 8.14 versus 8.14 yesterday
- Yield on 10-Year Government Bond 1.85% versus 1.86% yesterday
- Yield on 10-Year China Development Bank Bond 1.97% versus 1.97% yesterday
- Copper Price +0.25%
- Steel Price +0.09%
