Chinese Indices Lower, Bucking Broader Trend

There was no new year cheer for Chinese equities as ’22 trade got underway. The CSI 300 trades ~1% lower, while the ChiNext is ~2% worse off. News that China has released revised internet security check rules for large tech cos when it comes to overseas equity listings, which will come into play next month, likely weighed on risk appetite in China. Such a move has been in the pipeline for some time, but the confirmation of increased regulatory burden for the Chinese tech space will be worrying some investors in a headline-light session. Elsewhere, the PBoC started to remove some of the year-end OMO liquidity that it provided, which may have hampered the space further.

• Further afield, the major regional equity indices followed their U.S. counterparts higher during Asia-Pac hours (a reminder that the S&P 500 registered a fresh all-time closing high on Monday but failed to breach last week’s all-time intraday high), although the Hang Seng was limited by its exposure to China’s tech sector. China Evergrande resumed trading after making some key disclosures that didn’t really move the needle for the firm.
• A reminder Tesla was the notable U.S. outperformer on Monday, in lieu of its far better than expected Q4 deliveries data.