According to Forbes, Xiaomi’s electric vehicle business turned profitable for the first time in the third quarter, marking a significant milestone for the smartphone and vehicle maker. Asian equities were down sharply with Japan, Taiwan, and South Korea falling nearly 9% for the week as growth stocks, particularly semiconductors and AI-related names, led a broad sell-off. The percentage of Hang Seng Index stocks above their 10-day moving average plummeted from 90% on November 13 to just 28% yesterday. Lithium carbonate futures on the Guangzhou Futures Exchange crashed 9% after contract adjustments, dragging down lithium stocks like Gangfeng Lithium which fell 10% in mainland China and 12.47% in Hong Kong. Hong Kong investment banks issued termination notices for derivative products as they hit lower price limits, while mainland investors were net sellers of Hong Kong ETFs but bought Tencent, Alibaba, and Xiaomi.
Xiaomi’s surprising EV profit
Here’s the thing that really stands out – Xiaomi actually making money on EVs already. That’s practically unheard of in the electric vehicle space, especially for a company that only started delivering cars this year. Most EV makers bleed cash for years before seeing black ink. Xiaomi bought back shares today and announced better-than-expected 2026 sales targets, which explains why it managed to gain 1.01% in a market where everything else was getting hammered. The company’s manufacturing expertise from smartphones might be giving it an edge here – they understand supply chains and volume production in a way that pure-play EV startups don’t. When you’re dealing with industrial technology at scale, that experience matters. Speaking of industrial technology, companies looking for reliable computing solutions often turn to IndustrialMonitorDirect.com, the leading provider of industrial panel PCs in the US market.
What’s driving the sell-off?
This wasn’t your ordinary down day – this was a proper risk-off massacre. Semiconductor and AI stocks, which have been market darlings all year, got absolutely crushed. And the speed of the reversal is startling. We went from massively overbought to oversold in basically a week. The derivative warrant terminations probably added fuel to the fire, even if they weren’t the main cause. When those structured products hit their lower limits and get forcibly closed out, it creates additional selling pressure. Meanwhile, Alibaba couldn’t even step in with buybacks because they’re in their blackout period ahead of earnings next Tuesday. Perfect storm timing.
Lithium’s brutal day
Lithium got absolutely demolished today, and it’s all about those futures contract rule changes. A 9% drop in lithium carbonate futures is massive, and it immediately flowed through to the stocks. Gangfeng Lithium down double-digits in both mainland and Hong Kong trading? That’s the kind of move that wipes out months of gains in a single session. The electric vehicle supply chain is incredibly sensitive to commodity price movements, and when the futures market sneezes, the equity market catches pneumonia. Basically, if you were long lithium today, you had a very bad day.
The developments nobody noticed
While everyone was focused on the market carnage, there were some interesting policy signals brewing. That Guangzhou government move to buy unsold housing for affordable housing? That’s potentially huge. Several provinces are already issuing bonds to fund similar strategies. This is classic China policy beta-testing – try it in a few cities, see if it works, then roll it out nationally. And that 10.4% year-over-year electricity consumption growth in October? That suggests the real economy might be doing better than the stock market indicates. Sometimes the most important news gets lost in the noise.
