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China Stocks Underperform, HSI Pares Losses, US Futures Higher

EQUITIES

China equities are trading on the back foot, amid a number of headwinds, although HK stocks have pared a good deal of early session losses. Sentiment is more positive elsewhere, aided by a firmer US futures backdrop (+0.50% for Eminis at this stage).

  • US futures opened higher and have stayed in positive territory for the session, with reports from late last week of further Fed support for embattled bank First Republic likely helping at the margins. Surging deposits to large US banks had also slowed according to CNBC weekend reports. Still, we are off best levels for eminis.
  • A headwind from China stocks has been evident, with the CSI 300 off 0.95% at this stage. Weaker industrial profits for Feb (-22.9% y/y ytd) didn't help, while Sinopec posted disappointing earnings. Housing related stocks were also under pressure after weekend reports from a major developer that the housing slump may drag on.
  • Hong Kong shares were weaker, but the HSI pared losses of as much as 2% to be back near flat. So, this may help China stocks stabilize as the session continues.
  • Sentiment has been less volatile elsewhere, Japan stocks +0.45% in terms of the Topix. The Kospi and Taiex sit slightly lower.
  • Trends in SEA are mostly positive, led by Singapore stocks (+1%), but Indonesian and Philippine stocks have lagged.

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