CSI 300 Lodges Longest Run Of Weekly Losses In Over A Decade, HK Tech Hit By Clampdown

MNI (London) - The CSI 300 finished 0.2% higher on Friday, but still registered a sixth straight week of losses, which equates to the longest losing run seen in over a decade. Meanwhile, the Hang Seng shed 1.7% on Friday.

• Weakness in HK-listed tech names provided the most notable swing, with the Hang Seng Tech index losing over 4% on the back headlines noting that Chinese regulators will implement fresh curbs re: online gaming.
• Aluminium-linked companies benefitted from news that China will cut export tariffs on high purity versions of the metal.
• There is plenty of talk of “cheap” Chinese equity valuations, but that has been the case previously.
• Chinese equity markets have had a disappointing ’23, with the benchmark CSI 300 shedding ~14% YtD. A reminder that bullish expressions surrounding Chinese equities were a favoured call heading into the year, given expectations surrounding economic performance after the dismantling of the zero COVID policy that hampered economic activity in the early 2020s.
• Instead, a relatively tepid bounce in economic activity, coupled with the evolution of risks surrounding the sizeable property sector and local government debt financing matters, blunted hope surrounding the world’s second largest economy.
• That, along with various rounds of policy clampdowns in recent years, has weighed on Chinese equities, even with stimulus measures being deployed and expectations for further policy loosening evident.
• HK-China Stock Connect links generated modest net outflows for the third session in five (CNY2.5bn).