Asian stocks mostly down, Japan doing better than India, Thailand
Asian stocks were mostly down, with Japan doing better than India and Thailand.
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Asian equities were largely off today, with Japan outperforming while India and Thailand underperformed. This is a trend we expect to continue in the coming days and weeks, as investors seek out stability in the face of global economic uncertainty.
While many people in China and South Korea are off celebrating National Foundation Day and the National Holiday respectively, 130 million vacation trips are estimated to be taken this year. This is a slight decrease from last year, but many urban dwellers are still expected to visit their ancestral homes or go on vacation.
The Hong Kong market started the day off strong, but dipped mid-day after the UK canceled its proposed corporate tax cut. However, heavyweight HSBC (5 HK) was able to mitigate some of the losses and the market closed only -2.18% down from its intra-day low of -3.52%.
This week's light trading volume is due to China's Golden Week vacation and the closure of Hong Kong markets tomorrow. Short selling volumes have fallen 19% from Friday, and 20% of Main Board turnover in Hong Kong is now short. This may become a problem if the Hong Kong Exchange does not take measures to avoid it. Overnight, 39% of JD.com HK's turnover was short, while Meituan, Tencent, and Alibaba saw short turnover decline.
It is clear that the Chinese government is focused on the housing situation in Hong Kong, as evidenced by the recent policies released in support of the sector. This is good news for investors in the real estate market, as it is likely to see continued growth in the near future. However, some of the most heavily traded stocks in Hong Kong, such as Tencent, Alibaba, and Meituan, have all fallen in value over the past day or so. It is unclear why this is the case, but it is something that investors will be watching closely in the days to come.
It is worth noting that despite strong sales numbers from Nio, XPeng, and Li Auto, BYD's stock fell on the news. This is likely due to concerns about the company's ability to maintain its current growth rate, as well as competition from other EV manufacturers.
Bilibili HK's decision to make Hong Kong its primary exchange is a positive step that should pave the way for the company's inclusion in the Southbound Stock Connect program in November. This move will give Bilibili greater access to international investors and should provide a boost to its share price.
Deloitte-China's decision to pay a fine to the SEC for infractions during their audits is a positive step forward. This shows that the company is committed to adhering to US standards and regulations. This is important for the continued success of US-listed Chinese companies.
The Hang Seng and Hang Seng Tech indexes fell on lower volume, with decliners outnumbering advancers. Short selling turnover was down, but still accounted for a significant portion of total turnover. Growth and value stocks were mixed, with small caps outperforming large caps. The best performing sectors were real estate, materials, and health care, while the worst performing sectors were financials, utilities, and consumer discretionary.
This week's closures of the Shanghai, Shenzhen, and STAR Board exchanges are a blow to the global economy. These exchanges are some of the busiest and most important in the world, and their closure will have far-reaching consequences.
Last night's exchange rates, prices, and yields
As mainland China's fixed income and currency markets were closed overnight, many investors were left wondering what the future holds for these important markets. With so much uncertainty, it is difficult to predict what will happen next.