China & HK Equities Lower, Mixed China Data, Small-Caps Plunge

Hong Kong and China equity markets are lower today, China Mainland equities are faring better than Hong Kong. It has been a busy morning for China economic data, with GDP coming in at 5.3% vs 4.8% expected, retail sales missed estimates coming in at 3.1% vs 4.8% expected, Industrial Production also missed coming in at 4.5% vs 6.0% and Property developer names fell as home prices continued to fall in March, adding pressure on authorities to step up efforts to support the embattled real estate market. While earlier China's small cap index the CSI2000 tumbled over 6% after the regulators pledged to be tougher on de-listing companies, while the CSI1000 was down 3% verses the large-cap CSI300 down just 0.60% at their worst, the difference in performance could also be linked to buying by the National team, who focus on large-cap indices.

• Hong Kong equities are lower today and continue to underperform China Mainland equities, the HSTech Index is now down 2.34% and has broken below the 3,400 level it had been trading above since early March. The Mainland Property Index is faring slightly better, down only 1.62% at 1,152 although just holding above an important support zone of 1,150, the index did break below here earlier this morning however has been able to get back above with a break and close below here opening up a move to all time lows of 1,075 made in January, the HSI is off 1.64%. In China, markets are digesting economic data, large cap indices are performing better than smaller-caps with the CSI300 down 0.43%, while the CSI1000 is down 2.33% and the CSI2000 down 2.20%.
• China Northbound saw 8.1b of inflows on Friday, with the 5-day average at -0.06billion, while the 20-day average sits at 0.43billion yuan.
• In the property space, Times China faces a winding-up petition filed by Hang Seng Bank for financial obligations totaling $173.2 million and HK$731.4 million, with the first hearing set for July 3. Despite this, Times China asserts that the petition doesn't signify the company's winding up and plans to oppose it while working with creditors on a restructuring plan. China Vanke plans to use a $18 billion asset package as collateral to secure new bank loans amid concerns about its ability to avoid default. The company discussed this strategy with analysts at an investor event, aiming to alleviate worries following a recent market downturn. Despite the company's efforts, details about the asset package or potential sales remain undisclosed, and Vanke's response caused a slight uptick in its shares and bond prices.
• (Bloomberg) PwC Denies Allegations in Anonymous Letter on Evergrande Work (see link)
  
• (Bloomberg) China Tells Iran Cooperation to Last Despite Attack on Israel - (see link)
• (MNI) MNI BRIEF: China Q1 GDP Stronger Than Expected At 5.3% - (see link)
• Looking ahead, after a busy day of economic data, there will little else until the 1 & 5-yr LPR on Monday, Hong Kong has Unemployment data due on Thursday.