China Equities Mixed, Property Higher On Local Gov Buying News

Chinese equities are lower today, largely due to Alibaba reporting a sharp drop in net income with a buyback doing little to help the stock, while Tencent beat expectations, but gave a more cautious tone on the outlook for the Chinese economy, we now look ahead to earnings from Baidu and JD.com later this week. Earlier, China kept the 1yr MLP on hold at 2.50% and the US increased US tariffs on a wide range of Chinese imports including semiconductors, EVs and batteries. Hong Kong markets is closed today for Buddha's Birthday.

• China onshore markets are lower today, the CSI300 down 0.50%, we still hold above all moving averages with support now the 20-day EMA at 3,607, the CSI300 Real Estate Index is up 2.15%, it could be on the back of reports that the Chinese government will allow local governments across the country to buy unsold homes. Small and growth indices are also lower today although faring slightly better than the large-cap space with the CSI1000 is down 0.30% while the ChiNext off 0.15%.
• In the property space, China is contemplating a significant proposal to address its struggling property market by having local governments purchase millions of unsold homes, with the aim of converting them into affordable housing. This ambitious plan, currently under review by the State Council, involves state-owned enterprises buying distressed developer properties at discounted rates, funded by loans from state banks
• Looking ahead, Industrial Production & Retail Sales on Friday