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Posted June 5, 2026 at 10:45 am
Asian equities ended the week with a thud, as profit-taking in South Korea spread to the region. The KOSPI (Korea) Index fell -5.54%, led lower by SK Hynix, which fell -6.07%, and Samsung, which fell -3.8%. We’ll see if Jensen Huang’s four-day visit to the country can restore animal spirits. Indonesia’s Jakarta Stock Exchange Composite fell -4.2% to reach a 52-week low, after having plunged -38% from mid-January, following the release of several government policies that are not popular with investors and MSCI’s potential downgrade of the country’s markets from emerging to frontier status. The US dollar was weaker versus most Asian currencies, except for the Korean Won, as the CNY per USD exchange rate has come back up to 6.77.
Hong Kong and Mainland China were not immune to the regional downdraft overnight, as AI plays and year-to-date (YTD) winners, including semiconductors, electronic equipment, and communication equipment, were all hit hard. The severity of the downdraft and profit-taking was fierce. Hong Kong-listed semiconductor stocks, including Semiconductor Manufacturing International (SMIC), which fell -7.18%, Montage Technology, which fell -9.21%, and Hua Hong Semiconductor, which fell -7.16%, were all hit hard. Hardware suppliers Victory Giant and YOFC fell by -11.18% and -4.63%, respectively, while AI large language model (LLM) providers MiniMax and Knopwledge Atlas, which is also known as Zhipu, fell -16.65% and -9.05%, respectively, despite the latter being added to Southbound Stock Connect next week.
Internet stocks were off, but not significantly. Meanwhile, Mainland investors were net sellers of Hong Kong-listed stocks and ETFs, totaling -$309 million. Although Tencent fell -1.26%, the stock saw a net buy of $216 million from Mainland investors, the largest since March 16th. Meituan rose by 1.72% after announcing its 900,000th drone delivery.
Interestingly, there has been little attention to JD.com’s annual 618 E-Commerce sales event, which is seeing strong pre-sales. E-Commerce is just out of sight and out of mind, I suppose. ZTE gained +5.3% following yesterday’s partnership with Tencent on cloud computing. Non-ferrous metals were hit hard in both Hong Kong and Mainland China.
There was some AI profit-taking in Mainland China, as technology hardware was hit; electronic equipment makers Foxconn and Eoptolink fell by -5.11% and -3.60%, respectively. Chipmakers were also affected, as Cambricon fell -4.39%, Semiconductor Manufacturing International (SMIC) fell -5.55%, Montage Technology fell -7.81%, and Naura fell -3.77%. The chip-heavy STAR Board fell -4.01% overnight, though banks had a good day.
Mainland-listed shares of autonomous driving company Leader Harmonious Drive Systems gained +20%, hitting a limit up. The surge was driven by a respected Singapore-based hedge fund naming the auto parts and transmission maker, which has transitioned to robotic actuators, as its top humanoid robotics pick. It is worth noting that we are among the top five US investors that own the stock, which is not part of the MSCI indices currently.
The ETFs favored by the “National Team,” investment firms associated with China’s sovereign wealth, had below-average volumes.
A Mainland article pondered whether mobile phone makers’ AI LLMs could replace apps such as Tencent’s WeChat. Why wouldn’t I talk into my phone and ask it to book a flight and hotel for a business trip, thus bypassing online travel websites and apps? You can easily draw similar parallels to other applications (“Buy XYZ stock!” etc.). The article’s answer was no, as mobile phone makers will want to partner with Tencent to ensure that WeChat and other super apps are available, given their large user bases. While building an app is not hard, the embedded user base is impossible to replicate. It is similar to the downdraft in US software stocks due to AI’s threat. This issue is likely a factor in the recent weakness of Hong Kong-listed internet stocks. A re-rating on this ground is not the proverbial silver bullet, but a factor, as the restaurant delivery war and tepid domestic consumption have weighed on the companies’ fundamentals. We recently saw US software stocks rebound. So, hopefully, we see a similar rebound play out in these stocks.
Yesterday afternoon, while examining Southbound Connect flows, I noticed that the database we utilize had given me incorrect data that we used in yesterday’s note.
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -1.2% |
| Hang Seng Tech | HSTECH Index | -1.7% |
| Hong Kong Turnover | HKTurn Index | 26.9% |
| Hong Kong Short Sale Turnover | HKSST Index | 13.1% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 20.4% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | -309.89 |
| China (Shanghai) | SHCOMP Index | -0.7% |
| China (Shenzhen) | SZCOMP Index | -1.3% |
| China (STAR Board) | Star50 Index | -4% |
| Mainland Turnover | .chturn Index | 11.4% |
| Japan | NKY Index | -1.3% |
| India | SENSEX Index | -0.2% |
| Indonesia | JCI Index | -4.2% |
| Malaysia | FBMKLCI Index | 0.6% |
| Pakistan | KSE100 Index | -0.2% |
| Philippines | PCOMP Index | 0.4% |
| South Korea | KOSPI Index | -5.5% |
| Taiwan | TWSE Index | -1.3% |
| Thailand | SET Index | -0.8% |
| Singapore | STI Index | -0.3% |
| Australia | AS51 Index | -0.7% |
| Vietnam | VNINDEX Index | 0.4% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today’s Volume % of 1-Year Average | 128 | 137 |
| Advancing Stocks | 132 | 3111 |
| Declining Stocks | 370 | 1934 |
| Outperforming Factors | None | Dividend Yield, Value, Low Volatility |
| Underperforming Factors | Momentum, Growth, EPS Revision | Momentum, Growth, Liquidity |
| Top Sectors | Financials, Consumer Discretionary, Real Estate | Financials, Healthcare, Staples |
| Bottom Sectors | Information Technology, Materials, Consumer Staples | Information Technology, Utilities, Energy |
| Top Subsectors | Consumer Staples Distribution, Transportation, Banks | Petrochemical, Construction Machinery, Aerospace/Military |
| Bottom Subsectors | Semiconductors, Tech Hardware, Chemical Industry | Semconductors, Computer Hardware, Power |
| Southbound Connect Buys | Tencent (Large), YOFC (Small) | N/A |
| Southbound Connect Sells | SMIC (Very Large), Hua Hong Semi, Victory Giant (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | -0.86 |
| Communication Services | 11 | -1.43 |
| Consumer Discretionary | 28 | -0.71 |
| Consumer Staples | 13 | -1.65 |
| Energy | 6 | -1.12 |
| Financials | 25 | 0.89 |
| Health Care | 16 | -1.05 |
| Industrials | 22 | -1.56 |
| Information Technology | 12 | -2.4 |
| Materials | 14 | -2.2 |
| Real Estate | 7 | -0.89 |
| Utilities | 11 | -1.35 |
| Mainland China Listed | 386 | -1.6 |
| Communication Services | 8 | 0.29 |
| Consumer Discretionary | 26 | -0.25 |
| Consumer Staples | 19 | 0.32 |
| Energy | 12 | -1.55 |
| Financials | 64 | 0.7 |
| Health Care | 31 | 0.55 |
| Industrials | 58 | -1.12 |
| Information Technology | 95 | -3.96 |
| Materials | 52 | -1.23 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -1.3 |
| Alibaba HK | 9988 HK Equity | -0.9 |
| JD.com HK | 9618 HK Equity | 0.7 |
| NetEase HK | 9999 HK Equity | -2.3 |
| Yum China HK | 9987 HK Equity | -0.6 |
| Baozun HK | 9991 HK Equity | -2.3 |
| Baidu HK | 9888 HK Equity | -3.5 |
| Autohome HK | 2518 HK Equity | -2.8 |
| Bilibili HK | 9626 HK Equity | 0.5 |
| Trip.com HK | 9961 HK Equity | -1.4 |
| EDU HK | 9901 HK Equity | -1.3 |
| Xpeng HK | 9868 HK Equity | -2.2 |
| Weibo HK | 9898 HK Equity | -1.2 |
| Li Auto HK | 2015 HK Equity | -1 |
| Nio Auto HK | 9866 HK Equity | -3.8 |
| Zhihu HK | 2390 HK Equity | -4.2 |
| KE HK | 2423 HK Equity | -1.9 |
| Tencent Music Entertainment HK | 1698 HK Equity | 1.8 |
| Meituan HK | 3690 HK Equity | 1.7 |
| Hong Kong’s Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| SEMICONDUCTOR MANUFACTURI-H | -7.2 |
| TENCENT HOLDINGS LTD | -1.3 |
| AIA GROUP LTD | -3.5 |
| ALIBABA GROUP HOLDING LTD | -0.9 |
| LENOVO GROUP LTD | -0.5 |
| YANGTZE OPTICAL FIBRE AND-H | -4.6 |
| HUA HONG SEMICONDUCTOR LTD-H | -7.2 |
| CONTEMPORARY AMPEREX TECHN-H | -1.7 |
| MEITUAN-CLASS B | 1.7 |
| KINGBOARD LAMINATES HLDG LTD | -8.2 |
| Shanghai and Shenzhen’s Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | -7.8 |
| BOE TECHNOLOGY GROUP CO LT-A | 4.6 |
| EOPTOLINK TECHNOLOGY INC L-A | -3.6 |
| GIGADEVICE SEMICONDUCTO-CL A | -7.8 |
| HENGTONG OPTIC-ELECTRIC CO-A | -1.8 |
| SUZHOU TFC OPTICAL COMMUNI-A | -4.9 |
| FOXCONN INDUSTRIAL INTERNE-A | -5.7 |
| SUZHOU DONGSHAN PRECISION-A | -6.9 |
| VICTORY GIANT TECHNOLOGY -A | -7.6 |
| JIANGSU ZHONGTIAN TECHNOLO-A | 0 |
—
Originally Posted June 5, 2026 – Korea’s AI Profit Taking Goes Regional, Week in Review
Content on China Last Night is for informational purposes only and should not be construed as investment advice. This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results; material is as of the dates noted and is subject to change without notice. This information should not be relied upon by the reader as research or investment advice regarding the funds or any security in particular.
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