Key News
Asian equities were mostly lower overnight, as Japan and Pakistan outperformed while Hong Kong and Mainland China underperformed.
China released its manufacturing purchasing managers’ index overnight in July, which weighed on markets. The reading came in at 49.3, indicating a contraction in manufacturing activity for the fourth consecutive month, a decrease from June’s reading of 49.7 and lower than the median forecast of 49.7. However, the Non-Manufacturing (i.e. services) PMI was 50.1, lower than in June but still indicating an expansion in activity. The numbers are not that great, though an expansion in non-manufacturing is what we want to see.
Alibaba and Meituan were lower overnight. Amsterdam-listed South African technology investment firm Prosus announced it would be selling its $4 billion stake in Meituan. It sold $250 million overnight in Hong Kong. The firm first purchased Meituan shares for the first time as Naspers, a South African media company, and has also had historical stakes in Alibaba. Meituan’s shares were -4.55% lower overnight. The share sale comes at a time when Meituan is experiencing extreme competition in the food delivery space that is its specialty. However, the company has a strong moat, and competition is becoming more measured, at the request of market regulators.
Mainland investors were net buyers of Meituan and Alibaba on weakness overnight, for the second day in a row. The dip-buying is good to see! Mainland investors consistently account for over 50% of Hong Kong’s turnover, which has been a key development in 2025. While it is good to see the support and interest, foreign investors likely need to come in as well for the Hang Seng to see a new support level.
The People’s Bank of China (PBOC), China’s central bank, took major steps to stabilize the Yuan, keeping it above a higher bar of exchange rate versus the US dollar, overnight, though the currency has remained relatively stable, maintaining its value since tariffs were first announced.
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