ASIA STOCKS
Hong Kong and Chinese equity markets are experiencing mixed performances today. Real Estate sector is the worst performing today with Mainland Property Index -3.20%, HS Property Index -1.50% while the CSI 300 Real Estate Index is -2.65%.
- In Hong Kong, the HSI edged up by 0.25%, supported by a 4.3% rally in Alibaba shares after the company was added to the Stock Connect program. However, concerns over China’s economic health linger, with other major tech stocks like Tencent and NetEase slipping, and Chinese biotech companies like WuXi Biologics facing sell-offs after the US House passed legislation targeting Chinese firms.
- On the mainland, Chinese stocks faced downward pressure as the CSI 300 trades 0.50% lower and is now testing eight-month low, with a break here opening a move to test the 2018 lows. Export data exceeded expectations, but weak domestic consumption and geopolitical tensions around Chinese biotech and supply chains are fueling investor caution. Additionally, property stocks such as Shimao Group and CIFI Holdings plummeted after being removed from the China-HK Stock Connect.
- China's exports grew by 8.7% y/y in August, surpassing expectations, while imports rose only 0.5%, resulting in a trade surplus of $91b the largest since June this year. Though a positive sign for China's economy, which is battling deflation, the rising trade surplus amid global trade tensions may further strain relationships with key partners like the US, Canada, and the EU.
Chart - CSI 300 Testing Yearly Lows
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