Local Carmakers Beat Out Tesla As Sales Surge In February, Xpeng Says Flying Cars Possible By 2026

Key News

Asian equities were mixed but mostly lower overnight following the selloff on Wall Street. Indonesia, Korea, and Thailand outperformed, while Indonesia and Thailand underperformed. China’s markets were little changed, though Hang Seng Tech saw profit taking from Tuesday.

Some computing-related stocks rose as optimism grew before an AI conference in Hangzhou on Thursday. Alibaba managed a small gain, though the broader internet sector was mostly lower. Semiconductor Manufacturing and Hua Hong Semiconductor were both lower, though.

Shares in Automakers extended gains after wholesale vehicle sales increased 34.4% year over year in February, according to data from the China Association of Automobile Manufacturers (CAAM). Tesla only accounts for about 5% of sales. The positive sales data comes just after Xpeng said that it could have its first flying car models available as soon as next year.

Government bond yields picked back up, reversing some of the declines from a selloff in recent days. There is a strong case for China’s yields to stay low as issuance increases and monetary policy remains “loose”.

Mainland investors nearly reached their record buy number from Monday in Hong Kong. They purchased a massive net $3.4 billion worth of Hong Kong-listed stocks and ETFs. This year, Mainland investors have been excellent dip buyers through the Southbound Stock Connect program.

The U.S.-China political relationship continues to evolve in the lead-up to a Trump visit, which could be as soon as next month. Fentanyl control continues to take center stage. Substance control authorities in China said that they have successfully complied with all applicable international drug control obligations. They also said that they are ready to return to dialogue on drug control as soon as possible. Meanwhile, Walmart has asked its China-based suppliers to lower their prices in response to tariffs, and the Ministry of Commerce is holding talks with Walmart on its demands. Perhaps, tariffs will get resolved soon enough so that the suppliers do not have to lower prices by much. We shall see.

Alibaba’s Tong Yi Lab said it has created an AI model that can discern a human’s emotional state through visual cues.

There was some chatter overnight about the government’s plan to allow municipalities more leeway in how they purchase unsold homes and use properties and proceeds and its potential impact on Beike, owned by KE Holdings, which is an online real estate platform. The company reports 2024 earnings on Monday.

The Hang Seng and Hang Seng Tech indexes both closed lower by -0.76% and -2.04%, respectively, on volume that decreased -9% from Tuesday. Mainland investors bought a net $3.4 billion worth of Hong Kong-listed stocks and ETFs. The top-performing sectors were Materials, which gained +2.33%, Utilities, which gained +1.26%, and Energy, which gained +0.16%. Meanwhile, the worst-performing sectors were Information Technology, which fell -3.27%, Consumer Staples, which fell -1.92%, and Health Care, which fell -1.14%.

Shanghai, Shenzhen, and the STAR Board diverged to close -0.23%, +0.13%, and -0.73%, respectively. The top-performing sectors were Communication Services, which gained +0.71%, Financials, which fell -0.11%, and Utilities, which fell -0.17%. Meanwhile, the worst-performing sectors were Consumer Staples, which fell -1.10%, Real Estate, which fell -1.10%, and Energy, which fell -1.04%.

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