Asian equities saw a mixed performance, with Hong Kong and Taiwan outperforming. Hong Kong investors were upbeat following the four-day weekend and played catch up with the Mainland’s positive move and better-than-expected PMIs. Xiaomi saw a significant gain of +8.97% after making a successful entry into the electric vehicle market. Competitors like Li Auto and XPeng had mixed results, with Li Auto gaining +1.98% and XPeng falling -5.61%. Brilliance China Auto also saw a significant gain of +25.93% on strong financial results and a large dividend payout that forced shorts to cover.
In Mainland China, foreign selling weighed on morning trading, leading to a negative close. Defensive/value plays outpaced growth stocks as tensions in the Middle East lifted energy stocks and lithium plays benefited from strong EV sales in March. Real estate development was the worst-performing subsector, with Vanke falling -5.35% following an analyst downgrade and a public dispute with a local partner. However, redeeming a bond early was seen as a positive sign.
The National Development and Reform Commission (NDRC) held a meeting with several companies on large-scale equipment updates and consumer goods replacement, including JD Group, Midea, Haier, and Gree. The CNY and Asia Dollar Index were weaker against the US dollar, and hog prices increased +2% month over month in March, leading to expectations of a CPI increase. The Hang Seng and Hang Seng Tech indexes gained +2.36% and +1.89%, respectively, with increased volume and a mix of stock advances and declines.
In Hong Kong’s Main Board, short turnover increased significantly, with the value factor and large-cap stocks outperforming growth factors and small-caps. The top sectors were energy, tech, and materials, while healthcare saw a slight decline. Southbound Stock Connect volumes were high, with significant buying from Mainland investors in Hong Kong stocks and ETFs. In Mainland China, Shanghai, Shenzhen, and the STAR Board all saw slight declines, with a mix of sector performances and foreign investor selling.
Overall, the markets in Asia showed mixed performance with Hong Kong and Taiwan leading the way. The Hong Kong market saw strong gains in certain stocks, while Mainland China faced challenges from foreign selling. Sector performances varied, with energy, tech, and materials performing well, while real estate and healthcare faced some setbacks. Despite some volatile movements, the overall sentiment in the Asian markets remains cautious but optimistic.
