Asian equities were mixed for the week, with Mainland China outperforming. The electric vehicle ecosystem saw a boost as BYD reported strong monthly sales, and Xiaomi entered the space. President Biden and President Xi had a candid and constructive conversation, referencing their San Francisco meeting. The Caixin Services Purchasing Managers’ Index exceeded expectations, indicating positive economic growth. Manufacturing PMIs also beat expectations in March, showing signs of strength in the Chinese economy.
In other news, Asian markets were mixed, with South Korea and Japan underperforming after comments from Minneapolis Fed President Neel Kashkari. Some markets were closed for holidays, including Mainland China, Pakistan, and Taiwan. Hong Kong’s markets fluctuated but ended slightly lower, with Janet Yellen’s comments about China’s electric vehicle overcapacity drawing attention. Yellen’s visit to Guangzhou and her meeting with Vice Premier He Lifeng were reported in Mainland media.
Despite Yellen’s remarks, there were three days of China-US Commerce and Trade Working Group meetings in Washington DC, signaling increased communication between the two countries after disruptions due to COVID-19. Hong Kong’s most traded stocks included Tencent, Alibaba, AIA, Meituan, and HSBC, with internet plays showing mixed results. Energy and healthcare sectors were weak, with some stocks falling on various concerns. Real estate stocks were also off, despite Mainland media reporting positive news about state-owned developer Vanke.
Hong Kong’s markets ended the week higher, with China’s tech sector outperforming US tech since February 5th. The Hang Seng and Hang Seng Tech indexes fell slightly, with mixed performance across different sectors. Communication Services was the only positive sector, while Health Care, Energy, and Utilities fell. Southbound Stock Connect was closed, as were Shanghai, Shenzhen, and the STAR Board. An upcoming webinar on Quadratic Capital is scheduled for April 24th, and new content is available to read.
In terms of last night’s performance, Mainland China’s fixed income, commodity, and currency markets were closed. Overall, the Asian markets showed mixed results for the week, with signs of strength in the Chinese economy and increased communication between China and the US. Despite challenges in various sectors, Hong Kong’s markets ended the week positively, with China’s tech sector emerging as a strong performer compared to US tech. Investors continue to watch for updates on key economic indicators and developments in the China-US relationship.
