Market Insights: April 22nd, 2024

Stock Market Trends:

• The China A-share market (Shanghai and Shenzhen stock exchanges) opened low but trended higher today, with all three major indices turning red. By the time of publication, the Shanghai Composite Index had risen by 0.28%, the Shenzhen Component Index by 0.41%, and the ChiNext Index by 0.45%. On the board, industries such as military, breeding, liquor, and insurance led the gains, while AI, low-altitude economy, gold, and oil & gas sectors saw larger declines. The majority of individual stocks rose, with over 2700 stocks in the two markets showing increases.
• In the Hong Kong stock market, the Hang Seng Index gained 2.39%, and the Hang Seng Tech Index rose by 2.49%.
• Most Asian stock markets showed an upward trend, but were significantly volatile overall, influenced by a sell-off in chip stocks led by Nvidia.

International Economic Situation:

• The yield on U.S. two-year Treasury bonds (UST) rose from 4.2% in January of this year to 4.9%, roughly the same as last August. This could trigger concerns of a hard landing for the economy and impact risk assets.
• Prices of major non-ferrous commodities such as gold and copper continued to rise, with Shanghai copper futures prices reaching an 18-year high and the settlement price of international gold futures reaching an all-time high.

LPR Quotation:

• In April 2024, the Loan Prime Rate (LPR) published by the People's Bank of China maintained the same levels for both one-year and five-year terms. The one-year LPR is quoted at 3.45%, unchanged from the previous month; the rate for five years and above is quoted at 3.95%, also consistent with the previous month.

International Market Fluctuations:

• Easing tensions in the Middle East, reduced risk aversion, leading to fluctuations in the markets for gold, Bitcoin, and crude oil.

Performance of Individual Stocks in the Stock Market:

• During the U.S. stock trading session, Chinese concept stocks experienced a downturn, with Li Auto falling by 9.6% and NIO by 5%.
• AI concept stocks were severely hit, with Advanced Micro Devices (AMD) plummeting by over 20%, Nvidia by 10%, and ARM also suffering significant losses. Following less-than-expected financial reports from companies such as ASML and TSMC, chip stocks and AI concept stocks witnessed a further decline. AMD announced it would publish its third-quarter financial results on April 30, deviating from the previous practice of releasing results early, causing investor concerns and a significant drop in its stock price.