Asia Follows Wall St. Lower; Hong Kong, Chinese Equities Outperform

Most Asia-Pac equity indices are worse off at typing, largely tracking a negative lead from Wall St. Hong Kong and Chinese equities bucked the broader trend of losses, continuing their recent outperformance against peers globally.

• The Hang Seng Index outperformed, sitting 0.8% better off after paring opening gains of as much as 1.2%. China-based tech names lead gains (HSTECH: +1.5%), with analysts pointing to an easing in regulatory crackdowns by the Chinese authorities, rising bets for policy support for the COVID-hit Chinese economy (keeping in mind that China May new home price data released yesterday pointed to a decline for a second consecutive month), and rate divergence between the U.S. and China to support optimism in the space.
• The CSI300 trades 0.3% higher, having flipped between gains and losses throughout Asia-Pac dealing. Broad gains in consumer staples and industrials countered relatively shallower losses in healthcare and financials, with large-caps such as Kweichow Moutai (+2.9%) and CATL (+4.2%) leading gains.
• The Nikkei 225 sits 1.6% worse off at typing, with tech-based names and large-caps underperforming amidst evident spillover from weak sentiment in high-beta equities during Thursday’s NY session. Large losses were observed in favoured names such as Softbank Group (-3.4%), Tokyo Electron (-5.1%), and Fujitsu Ltd (-3.9%).
• The ASX200 deals 2.2% lower at writing after plunging to as low as -2.5% after the open, with losses observed across virtually every sub-index. Commodity and tech-based names lead losses, with focus on worry re: economic stagnation evident.
• U.S. e-mini equity index futures sit 0.5% to 0.7% better off at typing, with NASDAQ contracts leading gains. Zooming out, e-minis operate a little above their respective cycle lows made on Thursday (18-month low for S&P500 contracts).