Asian equities were higher overnight, with Mainland China reopening following its Labor Day holiday. Japan, South Korea, and Thailand were closed for various holidays. The Ministry of Culture and Tourism reported significant increases in domestic travel in China compared to 2019. Real estate policy support continued to be amplified, with Shenzhen clarifying home purchase restriction adjustments. Hong Kong had a choppy morning but closed near intra-day highs on high volumes.
Mainland investors were active in Hong Kong, buying a net $650 million worth of ETFs and stocks through the Southbound Stock Connect. Hong Kong’s most traded stocks included Tencent, Meituan, Alibaba, CNOOC, and AIA. Trading desks’ mood appears to be improving, with skepticism about the rally still high. US-listed China equity ETFs saw both inflows and outflows, indicating a mixed sentiment among investors.
Mainland China reopened after being off since last Tuesday, with Shanghai and Shenzhen seeing strong gains on good volume. Foreign investors bought a net $1.29 billion worth of Mainland stocks, including Kweichow Moutai. The Chinese Yuan made a strong move against the US dollar, closing at 7.21 CNY per USD. President Xi arrived in France for trade talks, while Geely Automobile is looking to pursue an IPO of its EV brand Zeekr in the US. Berkshire Hathaway’s annual shareholder meeting drew Chinese investors’ attention.
In Hong Kong, the Hang Seng and Hang Seng Tech indexes gained, with increased volumes. Short turnover increased, with the value factor outperforming the growth factor. The top-performing sectors were Utilities, Industrials, and Health Care, while Real Estate fell. Foreign investors bought a net $650 million of Hong Kong-listed stocks and ETFs through the Southbound Stock Connect.
In Mainland China, Shanghai, Shenzhen, and the STAR Board gained on positive factors, with all sectors seeing gains. Foreign investors bought a net $1.29 billion worth of Mainland stocks, with sectors like Consumer Staples, Health Care, and Consumer Discretionary leading the gains. CNY and the Asia Dollar Index were higher versus the US dollar, while the Treasury curve steepened. Steel prices gained while copper prices were off.
