Asian equities had a mixed week, with China markets performing well. The Hang Seng was up +6.89%, Hang Seng Tech Index up +11.73%, Shanghai up +2.74%, Shenzhen up +4.84%, and the STAR Board up +5.44%. Tesla received approval for its autonomous driving technology in China, using Baidu’s maps. Yum China reported record revenue, slightly missing analyst expectations. Apple’s earnings beat had mixed effects on Asian equities, with Hong Kong outperforming and India underperforming.
Hong Kong-listed stocks had a good day following strong gains in US-listed China stocks. Domestic and international travel data indicated a strong year-over-year increase, challenging assumptions about the Chinese consumer. Travel-related stocks like Macau casinos and travel booking sites saw gains. Consumer names were mixed, with Yum China gaining while Haidilao fell. Popular stocks like Tencent, Alibaba, and JD.com saw gains.
Online real estate company KE Holding (BEKE) and Hong Kong-listed real estate stocks saw increases following reports of trade-in deals by Shanghai real estate firms. Electric vehicle and auto stocks were largely higher, with BYD, Li Auto, and XPeng seeing gains. The real estate sector saw strength due to policy support from the Politburo.
There was speculation about a rally in US-listed China stocks, with short covering being a factor. China technology has been outperforming US technology and large caps for over three months. Investors are starting to reallocate their portfolios toward China and China technology, with momentum building among hedge funds and individual investors. The rally could continue as institutional investors transition from underweight to neutral positions in China stocks.
The Hang Seng and Hang Seng Tech indexes gained, with increased volume and positive performance in sectors like Consumer Discretionary and Real Estate. Meanwhile, Shanghai, Shenzhen, and the STAR Board were closed overnight. Mainland China’s currency, commodity, and bond markets were also closed. The article urges readers to read more about the China Market Connect in March 2024, highlighting the importance of Asian markets in the current economic landscape.
