Asian equities saw a mixed day in trading overnight, with China and the Philippines performing well, while Japan underperformed. Markets in Australia and Hong Kong were closed for Easter Monday. Shanghai and Shenzhen posted strong gains, driven by positive results from March’s “official” PMIs, which surpassed expectations. The PMI surveys provide insight into the manufacturing sector, with readings over 50 indicating expansion and readings under 50 indicating contraction. China’s economy has been slowly rebounding, with strong new orders and manufacturing output. This is seen as a positive sign for the global economy as well.
Despite Stock Connect being closed overnight, Mainland China saw a strong move on higher volume and breadth. The electric vehicle (EV) ecosystem had a strong performance ahead of March sales data release. Companies like CATL and BYD saw gains, with BYD reporting the second-highest monthly sales ever in March for new energy vehicles (NEVs). Competitors like NIO, Xpeng, and Li Auto also reported strong sales numbers. In Hong Kong, markets were closed for Easter Monday. In Mainland China, Shanghai, Shenzhen, and the STAR Board all performed well, with growth factors and small caps outperforming value factors and large caps.
The top-performing sectors in Mainland China were Communication Services, Consumer Discretionary, and Technology, while utilities and energy sectors fell. The top-performing subsectors included office supplies, autos, and household products, while coal, highways, and oil & gas were among the worst-performing subsectors. The CNY and Asia Dollar Index both fell against the US dollar, and the Treasury curve steepened. Copper prices gained while steel prices fell. In other news, Microsoft’s stock performance and its impact on a Dynamic Dividend Equity Index ETF was highlighted in a separate article.
In terms of currency exchange rates, the CNY per USD was at 7.23, the CNY per EUR was at 7.79, and the yield on 1-Day Government Bond was at 1.46%. The yield on 10-Year Government Bond was at 2.31%, and the yield on 10-Year China Development Bank Bond was at 2.43%. The copper price increased by 0.68%, while the steel price decreased by 1.25%. Overall, Asian equity markets showed resilience and positive performance, driven by strong data from China’s manufacturing sector and positive sales numbers in the electric vehicle industry. The global economic implications of China’s economic rebound are seen as a positive sign for markets worldwide.
