Chinese Equities Still See Inflows From Abroad, Even With The CSI Shedding Over 1%

Another round of (still contained) net purchases of mainland Chinese equities via the Hong Kong Stock Connect schemes today, even as the benchmark CSI 300 index shed over 1%. Chinese equities saw an inflow of CNY1.326bn via those channels, lodging the sixth straight day of net inflows in the process, the longest such streak seen since March.

• Questions over the rebound in the troubled property sector and the feedthrough from yesterday’s softer than expected credit data continued to add fuel to the uneven economic recovery argument.
• Broader SOE’s faltered further, giving back a little more of this year’s impressive rally, even after yesterday’s fund meeting re: SOEs, while President Xi Jinping applauded the development of a new city outside Beijing, deeming it a “miracle,” while instructing officials to speed up existing plans to relocate institutions outside of the city.
• Material sector names struggled owing to the economic backdrop and related slide in commodity prices on Thursday.
• Tech sector gains faded, with the ChiNext finishing lower and the Hang Seng Tech Index only sitting 0.3% higher into the bell. The broader weakness filtered through to this sector, unwinding the early rally that was linked to JD.com’s earnings beat and executive reshuffle, as well as hope after the recent meeting between top level U.S. & Chinese officials in Vienna.