Asian equity markets were mixed overnight, with Mainland China stocks outperforming Hong Kong and Philippine shares. The US Department of Defense added Chinese companies CATL and Tencent to its blacklist, but the impact on investors was muted due to differing reactions in Hong Kong versus Mainland China.
Tencent fell 7.28% in Hong Kong, while CATL declined 2.84% in Mainland China. However, both companies have maintained their Buy ratings from brokers, citing no impact on their businesses. The blacklist is not an investment ban, and an executive order would be required for the additions to be added to a restricted investment list.
Other Chinese tech giants, including Xiaomi, have successfully challenged similar designations in the past. Meanwhile, semiconductor company Luxshare rose 3.77% after receiving approval for its acquisition of automotive supplier Leoni.
In other news, live streaming is estimated to account for 80% of China’s e-commerce growth in 2024, with Douyin (China’s “TikTok”) increasing its online gross merchandise volume by over 80%. Bytedance has launched the TikTok Shop globally, which could drive more online spending.
The Hang Seng and Hang Seng Tech indexes fell overnight, but Mainland investors bought a net $1.65 billion worth of Hong Kong-listed stocks via Southbound Stock Connect. Materials, Consumer Staples, and Real Estate were the top-performing sectors, while Communication Services, Information Technology, and Health Care suffered losses.
Shanghai, Shenzhen, and the STAR Board all closed higher, with Information Technology, Consumer Discretionary, and Materials leading the gains. The worst-performing sectors were Health Care, Energy, and Utilities.
Source: https://www.forbes.com/sites/brendanahern/2025/01/07/china-market-update-no-executive-order-means-no-problem-for-us-investors