India's Stock Market Closed for Guru Nanak Jayanti While Others Thrive

While Japan and South Korea's stock markets did well, India's market was closed in celebration of Guru Nanak Jayanti.

China Last NightKraneShares
China last night was a scene of intense activity, as people scrambled to prepare for the impending arrival of Hurricane Irma.

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Asian equity markets were mixed today, with Japan and South Korea outperforming while India was closed for Guru Nanak Jayanti. This holiday celebrates the birth of the first Sikh guru, Guru Nanak, and is an important event for the Sikh community. Google (GOOG) was one of the top performers on the day.

The economic consequences of another outbreak of COVID-19 in China are too great for the government to impose strict lockdowns like those seen in Shanghai earlier this year. However, this does not mean that people are not taking precautions – social distancing is still being practiced, and events like the Hong Kong Sevens tournament are being held with strict safety measures in place. Chinese pharmaceutical companies are also making progress in their efforts to develop a vaccine for the virus, with one company announcing the start of human trials in China.

It's good to see that EV sales continue to grow, albeit at a slower rate than in previous months. It's also encouraging to see that BYD is launching a luxury EV model, as this will help to increase the visibility of EVs and make them more appealing to a wider range of customers. However, it's disappointing to see that Hong Kong stocks were down across the board today, with Tencent being the only exception. Hopefully this is just a temporary blip and not a sign of things to come.

It is strange to see Alibaba off as Singles Day data looks promising thus far, especially for foreign brands with earnings next Thursday. I had the chance to attend an event Alibaba held for US companies from many industries such as luxury goods, pet food, and household goods that are selling during Singles Day. I was very impressed by the technology and live streaming used. Hong Kong short turnover increased as a percentage of total turnover to 17% today with internet names seeing mixed short volumes as Tencent had 15% of turnover short (15% yesterday), 33% (31% short turnover yesterday), and Alibaba 12% (down from yesterday’s 25%). Mainland markets were off with shipping down on weak export data though several tech sub-sectors had a good day. Foreign investors were net sellers -$523 million.

It was a mixed day on the Hong Kong stock market, with the Hang Seng and Hang Seng Tech falling slightly while some stocks advanced. Main Board short turnover decreased compared to yesterday, but value factors edged out growth factors by a small margin. Materials and energy were the only positive sectors, while discretionary, real estate, and healthcare stocks were among the worst performers. Southbound Stock Connect volumes were moderate, with Mainland investors buying $534 million of Hong Kong stocks today.

The Chinese stock market eased today, with the Shanghai, Shenzhen, and STAR Board indices falling by 0.43%, 0.4%, and 0.91% respectively. This came on volume that was 16.87% below yesterday's level, which was in turn 86% of the 1-year average. A total of 1,840 stocks advanced while 2,663 declined. Value factors outperformed growth factors, while small caps "outperformed" large caps by a very small margin. Real estate was the only positive sector, gaining 0.06%. The losers included staples (-1.77%), healthcare (-1.48%), and energy (-1.35%). The top sub-sectors included computer hardware, software, and motorcycles, while the worst performers were marine/shipping, liquor, and power generation equipment. Northbound Stock Connect volumes were moderate/light, with foreign investors selling a net $523 million of Mainland stocks. Treasury bonds rallied, while the Chinese yuan fell by 0.3% against the US dollar to 7.25. Copper prices also fell by 0.38%.

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Last night's exchange rates, prices, and yields

  • The Chinese yuan weakened against the US dollar on Thursday, with the CNY per USD rate falling to 7.25. This was down from the 7.22 rate seen the previous day.
  • The euro strengthened against the Chinese yuan yesterday, rising to 7.25 CNY per EUR. This is up from 7.21 CNY per EUR the previous day.
  • The yield on the 10-year government bond increased slightly yesterday, rising to 2.69%. This follows a trend of increasing yields over the past few days, as investors grow increasingly confident in the economy.
  • The yield on 10-year China Development Bank bonds remained relatively stable yesterday, closing at 2.81%. This is a slight decrease from the previous day's closing yield of 2.82%.
  • Copper prices fell slightly overnight, but are still holding steady near record highs.