Asian equities saw a mix of performance overnight amid continued tensions in the Middle East, with Mainland China’s Shanghai and STAR 50 indexes outperforming. Mainland indexes started lower but gained ground throughout the day, with Shanghai closing above +1%. The Northbound Stock Connect saw the highest inflow since mid-March, reversing the net outflow from Friday. All sectors were positive, with defensive and value sectors showing strong performance.
Hong Kong’s markets were largely lower, though defensive and value sectors saw gains. The State Council issued “9 Key Points” to improve China’s capital markets, including initiatives to control the supply of IPOs, encourage dividend payments, improve corporate governance, and increase allocation to equities by bank and trust products. Financials saw a sharp increase following an announcement that Central Huijin Investments will increase its holdings of Mainland bank stocks. However, Apple supplier Sunny Optical fell -3.53% in Hong Kong as global iPhone shipments were reported to be down -10% year-over-year.
The US economy may not be slowing as quickly as the Fed anticipated, but global data reveals a different story, with Japan reporting declines in machinery orders and industrial production. China’s export decline in March likely reflects a broader trend in global trade. Mainland-listed CRRC gained +11% on positive profit guidance, along with other railway and railway equipment manufacturers benefiting from infrastructure stimulus. The Hang Seng and Hang Seng Tech indexes closed lower, with Mainland investors buying a net $890 million worth of Hong Kong-listed stocks via Southbound Stock Connect.
In Mainland China, Shanghai, Shenzhen, and the STAR Board closed with mixed performance, with foreign investors buying a net $1.1 billion worth of Mainland-listed stocks via Northbound Stock Connect. Energy, Industrials, and Consumer Staples were the best-performing sectors, while Real Estate, Consumer Discretionary, and Materials underperformed. Looking ahead, a webinar on China Q1 Review and investment strategies is scheduled for April 18th, while a Quadratic Capital webinar on normalization is set for April 24th. Additionally, a new article explores the potential impact of generative AI on China’s internet giants.
Currency exchange rates remained relatively stable, with the CNY per USD at 7.24 and CNY per EUR at 7.71. The yield on 1-Day Government Bonds decreased to 1.44%, while the yield on 10-Year Government Bonds stayed flat at 2.28%. The 10-Year China Development Bank Bond saw a slight decrease in yield to 2.39%. Prices for copper and steel saw minimal changes. Overall, the global market trends reflect a mix of economic data and market performance, indicating potential challenges and opportunities for investors in the region.
