Asian equities had a strong day, with markets in Japan, Hong Kong, South Korea, and Taiwan all posting gains of around 2%, with Australia being the only market to close down overnight. In Hong Kong, internet stocks led the way as the Hang Seng closed above 17,000, boosted by positive sentiment from recent upgrades by UBS and Goldman Sachs. Positive financial results from Hong Kong Exchanges and Ping An also contributed to the upbeat mood, with SenseTime Group seeing a significant increase in its share price.
The most heavily traded stocks in Hong Kong included Tencent, Meituan, Alibaba, Kuaishou, HK Exchanges, and Ping An. There was a sense of improved regional sentiment, with Chinese investors showing interest in Hong Kong stocks. Mainland China also saw a small gain, with real estate prices down slightly despite relaxed housing purchase restrictions in Shenzhen. Foreign investors bought $635 million worth of Mainland stocks, as Secretary of State Blinken landed in Beijing for meetings.
Mainland China’s asset management industry is dominated by money market and bond funds, with equity funds making up a smaller percentage of industry assets under management. Active portfolio managers in China have a significant influence on stock prices, with investors closely following their stock positions and changes. The top mainland listed stocks held by active funds resemble the top index weights, indicating a herd mentality among Chinese investors.
In Hong Kong, the Hang Seng and Hang Seng Tech indices recorded gains on strong volumes, with all sectors in positive territory. Southbound Stock Connect volumes were high as mainland investors bought Hong Kong stocks, with Bank of China, Kuaishou, and HK Exchanges seeing large net buys. In Shanghai, Shenzhen, and the STAR Board, gains were recorded on moderate volumes, with tech and utilities sectors leading the way.
On the foreign exchange front, the CNY per USD and CNY per EUR remained relatively stable, while treasury bonds sold off and copper prices fell. Steel prices saw a slight increase. A webinar on Quadratic Capital is scheduled for today to discuss the normalization of markets. Additionally, the latest China Market Connect report for March 2024 is now available for reading. Overall, Asian equities have shown strength, with positive sentiment driving markets in the region.
