Asian equities showed a mixed performance overnight as investors awaited the US jobs report, which revealed that the US economy added more jobs than expected. However, the report also indicated an increase in unemployment, leading to a complex but still strong case for potential rate cuts towards the end of the year.
EU Announces New Tariff Rates for China-made Electric Vehicles
The EU announced provisional new tariff rates for China-made electric vehicles, with rates slightly lower than anticipated. BYD, a major exporter, will maintain its rate at 17%, while the average duty paid is expected to be around 20%. The electric vehicle ecosystem experienced mostly lower performance overnight.
Market Highlights
Internet stocks were mostly lower, with NetEase facing share pressure due to a delayed title release. Tourism stocks saw gains following positive policy developments, including a government pledge to enhance tourism infrastructure. Domestic tourism in China is thriving, with significant increases in visitor numbers reported at popular destinations like Xian.
Financials underperformed, with the PBOC announcing long-term government borrowing mechanisms to support consumers ahead of the upcoming Third Plenum meetings. Analysts are focusing on a potential shift towards a more consumption and innovation-driven economy in China, moving away from real estate speculation.
Market Closures
The Hang Seng and Hang Seng Tech indexes closed lower overnight, with Mainland investors showing interest in Hong Kong-listed stocks and ETFs. Shanghai, Shenzhen, and the STAR Board displayed varied performances, with sectors like Health Care and Materials showing strength while Financials and Consumer Staples faced declines.
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