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China Shares Surge On Policy Support, But We Sit Away From Best Levels

EQUITIES

Regional equities are higher, with much of the focus on China and associated markets, following weekend announcements designed to support equity market sentiment. US equity futures opened higher, but there was little follow to earlier positive moves. Eminis sit back at 4417, still reasonably close to Friday highs, while Nasdaq futures were last near 14984, also just in positive territory.

  • To recap, China announced yesterday it would cut the stock trading levy to 0.05% from 0.1%. The first such cut since 2008. Not surprisingly, onshore brokerages have done well. Other market supports were announced in the form of limiting IPOs, while 17 new ETF products were approved at the end of last week, which is reportedly a rare move in terms of so many being approved at once.
  • The CSI 300 opened more than 5% higher, but sits back at +2.3% at the break. In index terms we got above 3900 in the first part of trade but sit back under 3800 now.
  • The HSI is +1.7% higher at the break, but like mainland shares,are comfortably away from opening highs.
  • Elsewhere, Japan shares are higher, with gains of 1.3% for the Topix and 1.6% for the Nikkei 225 at this stage. For the Kospi and Taiex, gains are well under 1% at this stage. Offshore inflows into local shares have been fairly modest for South Korea at this stage, +$26.3mn.
  • In SEA, gains are also more modest, while Malaysia shares are down slightly. Singapore's Strait Times outperforming, with a 1% rally.

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