Investors Wait For London Calling

Key News

Asian equities were mostly higher overnight, with US-China trade talks in London drawing significant attention, though few concrete details have emerged so far.

Indonesia outperformed, along with Taiwan ahead of May sales data from Taiwan Semiconductor Manufacturing Company (TSMC). Several markets closed lower, including Hong Kong and Mainland China, which both declined in the afternoon as investors took profits. Pakistan’s market was closed for Eid al-Adha.

The renminbi (CNY) was slightly weaker against the United States dollar, as investors tempered their optimism about a potential trade deal in the absence of any major announcements. Notably, Hong Kong saw 308 advancing stocks versus 170 decliners, but internet heavyweights weighed on the indices.

It was a very light news day. Value stocks outperformed, while growth stocks were targeted for profit taking, with both Hong Kong and Mainland China giving up morning gains in the afternoon. Among Hong Kong-listed internet stocks, most declined except for KE Holdings, which gained +3.31% on news of Beijing’s housing support measures. BYD rose +3.71% in Hong Kong and +1.43% in Mainland China, outperforming the broader electric vehicle (EV), hybrid, and auto sectors, which remained under pressure due to price war concerns.

Internet regulators clarified live streaming rules, but this was widely expected and did not impact the market. One growth sector that continued to outperform was healthcare, with several companies posting double-digit daily returns. The rally in healthcare has been driven by cross-border deals, positive drug approvals, and broad policy support.

Mainland China was weaker overall, with the exception of banks, despite above-average volumes in exchange-traded funds (ETFs) favored by the so-called National Team. Despite this intervention, markets declined as investors waited for further news from London.

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Last Night’s Performance

Last Night’s Exchange Rates, Prices, & Yields

• CNY per USD 7.18 versus 7.18 yesterday
• CNY per EUR 8.20 versus 8.19 yesterday
• Yield on 10-Year Government Bond 1.66% versus 1.66% yesterday
• Yield on 10-Year China Development Bank Bond 1.71% versus 1.70% yesterday
• Copper Price +0.58%
• Steel Price -0.17%