Asia Pac Markets Higher, But China Underperforms

Asia Pac markets are tracking higher following a positive lead from US/EU markets in Tuesday trade. The main exception is China bourses, which are weaker into lunchtime break. US futures are modestly higher in the first part of Wednesday trade, but overall moves have been modest. Eminis sit near 4822, while Nasdaq futures are near 17037.

• At break, the CSI 300 is off just over 0.5%, putting the index (3316.5) close to recent cyclical lows. We saw LPRs held steady as expected, while developer China South City avoided a dollar bond default (SCMP).
• Still, flows into an ETF which tracks EM stocks (ex China) has surged in recent months (see this BBG link). Investors may still be reluctant to move into China markets given growth and policy stimulus uncertainties.
• Hong Kong markets have performed better. The HSI is up 1% at the break. A leadership restructure at Alibaba has improved sentiment in the company and aided broader sentiment.
• Japan markets are in positive territory, but away from best levels. Toyota has trimmed gains after it suspended shipments from subsidiary Daihatsu, after safety testing issues (see this BBG link).
• The Kospi has broken higher, up nearly 1.7%, buoyed by generally positive tech sentiment/soft landing optimism. The Taiex is lagging up 0.30% at this stage.
• In SEA, markets are tracking higher, but gains are under 1%.