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Forbes
3 days ago
- Business
- Forbes
China Market Update: Meituan Receives Outsized Mainland Flow, Week In Review
CLN KraneShares Asian equities ended a positive week mixed, led by India following a larger-than-expected rate cut (0.50% vs. 0.25%). South Korea was closed for Memorial Day, and Indonesia, Pakistan, and the Philippines were closed for Eid al-Adha, also known as the Feast of Sacrifice, 'a festival to honor the willingness of the Prophet Ibrahim to follow the command of Allah to sacrifice his son.' Hong Kong and Mainland China saw profit taking in recent growth and technology outperformers despite the Trump-Xi call, as some pointed to a lack of details, though President Trump confirmed the US would be represented by Bessent, Lutnick, and Greer at a yet-to-be-determined location. The markets had risen on the chatter of a call in another example of markets' forward-looking nature, i.e., buy the rumor and sell the news. Short-video platform Kuaishou Technology gained +8.44% as the company announced its Kling AI, an AI online video generator, will generate $100 million in revenue by February of 2026. E-commerce names, including Alibaba and which fell -1.44% and -1.45%, as several provinces, including Jiangsu and Chongqing, announced they had run out of home appliance subsidies to be used in the 618 (June 18) E-Commerce sales event. I suspect the issue will be resolved in short order. Electric vehicle (EV) stocks, including BYD, which fell -2.18%, Xiaomi, which fell -2.12%, Li Auto, which was flat, and XPeng, which fell -1.77%, were mostly lower on yesterday's news of the Ministry of Industry and Information Technology's (MIIT) price war warning. It seems like a positive to me! Value plays such as telecom and precious metals outperformed. Mainland investors bought the dip in Hong Kong, with $862 million worth of net buying via Southbound Stock Connect. Meituan saw another day of strong net inflow, as 13.54% of shares are now held by Mainland investors, up from only 11% earlier this year. I don't know what's driving Mainland investors' significant Meituan inflows, at 200 million shares bought, but it is interesting. Like Hong Kong, value stocks outperformed growth stocks in Shanghai and Shenzhen, as oil, precious metals, and aerospace stocks rallied. May's consumer price index (CPI) and producer price index (PPI) will be reported on Sunday. The US Treasury did not label China a currency manipulator, though it does highlight the strength of the Renminbi versus the US dollar, recently. CNY hit a low of 7.34 CNY per USD on April 9th following Liberation Day, though CNY has rallied to 7.18 (CNY is quoted USD per CNY, so a decline is appreciation versus the US dollar). More surprising is that Hong Kong and US-listed China stocks haven't rallied more due to the appreciation of the underlying businesses, as their revenues are denominated in Renminbi. Hopefully, we'll see this move soon! New Content Read our latest article: Navigating Global Crosswinds: Carbon Markets Respond to Tariff Tactics and Executive Orders Please click here to read Chart1 KraneShares Chart2 KraneShares Chart3 KraneShares Chart4 KraneShares Chart5 KraneShares Chart6 KraneShares
Reuters
3 days ago
- Business
- Reuters
Rupee ends higher as rate-cut boost for equities blunts dollar strength
MUMBAI, June 6 (Reuters) - The Indian rupee strengthened modestly on Friday as the Reserve Bank of India's steepest rate cut in five years boosted local equities, helping the South Asian currency eke out a gain even as the dollar firmed against major peers. The rupee closed at 85.6250 against the U.S. dollar, up from its close at 85.79 in the previous session. The rupee declined 0.2% on the week. The Reserve Bank of India (RBI) cut its key repo rate by 50 basis points on Friday and slashed the cash reserve ratio (CRR) for banks as low inflation gave policymakers room to focus on supporting growth. India's benchmark equity indexes, the BSE Sensex (.BSESN), opens new tab and Nifty 50 (.NSEI), opens new tab, about 1% each on Friday, posting their best one-day gain in two weeks as the rate cut fuelled domestic growth expectations. India's benchmark 10-year bond whipsawed between gains and losses as traders digested the central bank's policy moves, including a shift in stance from 'accommodative' to 'neutral.' The yield on the benchmark paper was last quoted a tad higher at 6.2237%. Meanwhile, dollar-rupee forward premiums fell in reaction to the rate cut with the 1-year implied yield dropping 10 basis points to 1.81%. The Indian central bank's "larger-than-expected 50 bps rate cut and 100 bps cut in the cash reserve ratio should support INR," DBS said in a Friday note. "We will consider lowering USD/INR's forecast if the US Federal Reserve pivots towards a rate cut later this year and sets the stage for more USD weakness," the noted added. On the day, the dollar index was up 0.3% at 98.9 in the run-up to release of closely watched U.S. non-farm payrolls data which will offer cues on how the world's largest economy is faring in the face of trade policy spurred uncertainty.
