CLN
Key News
Asian equities delivered mixed performance overnight, as Vietnam outperformed on a trade deal, while Taiwan, South Korea, and Thailand all lagged amid the absence of new deals.
News broke that Treasury Secretary Scott Bessent will travel to Stockholm to meet his Chinese counterparts, a potential signal of further thawing in US-China geopolitical tensions. Investors are watching closely to see whether this latest move provides a lift to US-listed China stocks, following last week’s positive push when the Nvidia H20 export ban was lifted.
The market continues to anticipate a possible Trump-Xi summit. The delay of China tariff decisions is seen as a sign that talks are progressing. In Hong Kong, the Hang Seng Index finished just above 25,000, and the Hang Seng Tech Index closed a touch above 5,600, while both Shanghai and Shenzhen moved gradually higher over the session. Notably, Southbound Stock Connect flows accounted for 61% of Hong Kong market volume for a second straight day, suggesting subdued foreign participation.
Sector-wise, market moves closely mirrored yesterday’s action, as the new mega-dam project announcement continued to support building materials, machinery, and construction stocks listed in both Hong Kong and Mainland China. The coal sector once again drove a value-investing bias, with Shaanxi Coal Industry climbing +7.93% and Shanxi Coking Coal jumping +10.07%, as fresh price increases are expected this week.
Hong Kong-listed internet stocks produced mixed results: Tencent rose +0.86%, Alibaba edged up +0.08% despite its Qwen3 AI outperforming OpenAI and DeepSeek, Kuaishou gained +1.82%, and JD.com ended flat. Robotics maker UB Tech fell -5.71%, after issuing 30 million new shares at a 9% discount to the previous close, raising HKD 2.47 billion (about $315 million). Unitree Robotics is reportedly planning a Hong Kong listing in October.
Among automakers, the Hong Kong share classes of BYD and battery giant Contemporary Amperex Technology (CATL) advanced +5.09% and +2.34%, respectively, after BYD announced stronger local sales than Tesla.
Mainland China’s markets steadily climbed throughout the trading session. The energy sector led, as solar companies outperformed, including Sungrow, up +1.90%, Tongwei, up +5.55%, and LONGi Green Energy, up +1.59%. Silicon futures on the Guangzhou Futures Exchange continued their strong rebound, finishing up +5.98% for the day and +17.82% over the last 10 days, helped by government-led production cuts initiated in early July. These measures brought silicon futures from a low of 6,982 to a close of 9,655.
There are signs that Central Huijin, the finance-focused branch of China’s sovereign wealth fund, was actively buying Mainland-listed equity exchange-traded funds (ETFs) based on mutual fund shareholder data as of the end of the second quarter. One major ETF reported that its largest shareholder, which is almost certainly Central Huijin, had increased its ownership by 10.874 billion shares, bringing its stake to 37.858 billion shares, or 40.26% of the fund. While an estimated US$10 billion in ETF inflows is noteworthy, it is modest relative to Mainland China’s roughly $12 trillion free-float market capitalization, representing only a minor contribution even when spread across multiple funds.
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Last Night’s Performance
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Last Night’s Exchange Rates, Prices, & Yields
- CNY per USD 7.17 versus 7.17 yesterday
- CNY per EUR 8.40 versus 8.35 yesterday
- Yield on 10-Year Government Bond 1.69% versus 1.68% yesterday
- Yield on 10-Year China Development Bank Bond 1.76% versus 1.74% yesterday
- Copper Price +0.49%
- Steel Price +1.78%
