Southbound funds recorded a net inflow of HKD 4.286 billion, with Xiaomi Group-W (01810), XPeng Motors-W (09868), and Pop Mart (09992) leading in net purchases, while Alibaba-W (09988), Hua Hong Semiconductor (01347), and SMIC (00981) saw the largest net sell-offs.
According to Zhitong Finance APP, CMB International released a research report stating that China's stock market showed mixed performance, with Hong Kong stocks rising. Healthcare, conglomerates, and real estate construction sectors led the gains, while discretionary consumption, industrials, and materials underperformed. Southbound capital recorded net inflows of HKD 4.286 billion, with Xiaomi Group-W (01810), XPeng Motors-W (09868), and Pop Mart (09992) ranking among the top net purchases, while Alibaba-W (09988), Hua Hong Semiconductor (01347), and SMIC (00981) saw the largest net sales.
The A-share market declined, with electrical equipment, machinery, and software services posting the largest drops, while diversified trade, home appliances, and petrochemicals registered the highest gains. Government bond yields remained stable, and the renminbi strengthened against the US dollar. China’s stock market experienced a style rotation, with low-valuation or previously underperforming sectors such as chemicals, consumer goods, and banking leading the rally, while sectors with significant prior gains lagged behind. This trend is expected to persist at least until mid-December when next year's policy stimulus focus becomes clearer.
US stocks edged slightly higher, with healthcare, financials, and materials sectors posting the strongest gains, while energy, communication services, and discretionary consumption experienced the largest declines. The end of the federal government shutdown and easing liquidity conditions boosted market risk appetite. However, investors expressed concerns about the risk of an AI bubble, resulting in a notable shift in market style. The Dow Jones Industrial Average consistently outperformed the Nasdaq, with funds flowing from technology stocks into value stocks. Buffett’s acquisition of chemical company OxyChem further reinforced this trend.
US Treasury yields continued to decline, while the US dollar reversed its earlier rise and turned lower. In October, 6.65% of subprime auto loans in the US were overdue by more than 60 days, the highest level on record since 1994, reflecting increasing financial pressure on low-income groups. Recent unofficial data indicates weakening employment figures, softening consumer spending, declining rental increases, and falling oil prices, suggesting inflation may retreat rather than rebound in the short term. This increases the likelihood of the Federal Reserve implementing two additional interest rate cuts within the next six months.
