Asian equities saw a strong day overall, with markets in Japan, Hong Kong, South Korea, and Taiwan all posting returns of around 2%. The only market that was down overnight was Australia. In Hong Kong, internet stocks led the market higher, with the Hang Seng closing above 17,000. The positive sentiment was supported by UBS upgrading China and Goldman Sachs re-rating Mainland stocks. Companies like Hong Kong Exchanges and Ping An also beat analyst expectations, contributing to the market’s gains.
The most heavily traded stocks in Hong Kong included Tencent, Alibaba, Meituan, Kuaishou, HK Exchanges, and Ping An, all of which saw significant gains. Sentiment in the region has been improving, with Chinese investors showing interest in Hong Kong stocks. The rally in Asian equities has raised questions about where the new investment is coming from, whether it is from historical stock warrants or US tech stocks. Mainland China also saw a slight gain, with foreign investors buying $635 million worth of stocks. The asset management industry in China is heavily focused on money market and bond funds, reflecting the high savings rate among citizens.
In terms of specific sectors, the Hang Seng and Hang Seng Tech indices both made gains, with strong volume and positive breadth. Main Board short turnover also increased, with growth factor and large caps outperforming. All sectors in Hong Kong were positive, with communication, discretionary, and materials leading the way. In Mainland China, Shanghai, Shenzhen, and STAR Board also saw gains, with the growth factor outperforming the value factor. Tech, utilities, and communication were the top sectors, while healthcare, energy, and real estate lagged behind.
Overall, the Asian markets showed strength, with positive performances across various sectors. The foreign exchange rates remained relatively stable, while Treasury bonds sold off. Copper prices fell, while steel prices gained slightly. It will be interesting to see how the markets continue to perform in the coming days, especially with ongoing geopolitical tensions and economic developments such as Secretary of State Blinken’s meetings in Beijing. Investors will be closely watching for any shifts in sentiment and market dynamics.
