China Real Estate Headwinds Persist, India Shares Buoyed By State Election Results

MNI (Australia) Regional equities are mixed to start the Asia Pac week, despite a positive cash lead from US/EU markets on Friday. Weakness is evident in most North East Asia markets, with Hong Kong and China remaining in focus. US yields have rebounded somewhat, which has likely trimmed positive sentiment at the margins, although most South East markets are up.

• Tensions in the Middle East, following attacks on ships in the Red sea over the weekend, coupled with US-China tensions in the South China Sea, are other potential negative points for the market. US futures are negative, but only down modestly at this stage. Eminis last near 4595 (-0.13%), Nasdaq futures off -0.30% (15976).
• At the break, the HSI is down 0.60%, while the CSI 300 is off nearly 0.30%. Evergrande has tracked higher in HK trade, after the company's liquidation hearing was adjourned to Jan 29 next year. Onshore media is also reporting meetings taking place between banks and developers in recent weeks.
• The CSI 300 real estate sub index is still down 2.3%, tracking lower for the 7th straight session. PBoC Governor Pan stated the focus will be on the quality, not quantity, of credit growth. He also reiterated that housing is for living not speculating.
• Japan markets are weaker, the Topix off by 0.85%, with a firmer yen likely weighing at the margin, although most gains have been shed as the session progressed.
• In SEA, Indian markets have opened up +1.5%, with sentiment buoyed by weekend state election results for the BJP party. These are the last set of elections before the national poll when PM Modi will seek a third term.
• Most other markets are firmer, except for Malaysia.