Asian equities were mixed overnight, with Taiwan outperforming and Mainland China underperforming. Volumes were thin, leading to volatility on light news. Hong Kong could not sustain yesterday’s bounce following interest rate cuts and post-Third Plenum resolution, as investors look for concrete stimulus policies. Growth stocks in Mainland China and Hong Kong underperformed, with many semiconductor and computer companies seeing selling pressure.
The US-China Business Council hosted a delegation of US multinationals in Beijing, signaling China’s continued openness to foreign corporations. The Hang Seng and Hang Seng Tech indexes fell on lower volume, with 78 stocks advancing and 405 declining. Short turnover also declined, with financials being the only positive sector. Southbound Stock Connect volumes were light, with Mainland investors buying $12 million of Hong Kong stocks.
In Mainland China, the Shanghai, Shenzhen, and STAR Board fell, with 991 stocks advancing and 3,895 declining. The utility sector was the only positive sector, while materials, technology, and consumer staples fell. Northbound Stock Connect volumes were moderate, with foreign investors net sellers of Mainland stocks. The Treasury curve steepened, and the Chinese yuan was slightly lower against the US dollar. Copper and steel prices fell.
Upcoming webinars include a China Q2 review and an overview of Hedgeye’s Proprietary Risk Range™ signals. In new content, an article revisits optimism in Hong Kong despite testing market conditions. Exchange rates, prices, and yields showed a slight decline in the Chinese yuan against the US dollar and euro, as well as lower yields on government and China Development Bank bonds. Copper and steel prices also saw a decrease.
