China/HK Equities Looking To Build On Tuesday Gains

A very volatile trading session on Tuesday saw indices moves of 5-10%, all closing in positive territory, after initially opening lower. Supportive Government Policies were the drivers of markets, while the upcoming meeting between President Xi and Chinese regulators to speak on Financial Markets spurred the second move higher.

• As Asian trading gets settled, Hong Kong Markets take the lead with notable gains: HSI surges by 1.30%, HS Tech by 2%, while mainland China indices show a more subdued performance with CI 300 rising by 0.20%, and ChiNext up by 1%.
• Chinese equity margin usage has experienced its most significant percentage decline since 2016, indicating sustained pressure in the market. Which could be a major reason for the recent sell off in Chinese equities this year, however the CSRC has pushed back on this idea. After hours Monday the CSCR noted that it would guide brokerages to adjust margin calls and maintain flexible liquidation lines, which has factored into the stabilization and bounce in Chinese equities during the Tuesday trading session.
• In sector specific news, Property names are higher today after government funding push, as the financial regulators call for a prompt implantation of financing coordination mechanism (BBG). While Chinese Vice Commerce minister held calls with US officials around concerns about US semiconductor control measures. This follows the meeting between China Vice Premier He Lifeng and US Treasury officials in Beijing on Tuesday (BBG). The talks included industrial policies and US concerns around over capacity.