CSI 300 Lodges Modest Losses, China Sees Marginal Net Inflows Via Stock Stock Connect

Mainland Chinese equities received marginal net inflows via the Hong Kong Stock Connect schemes today (CNY29.4mn), although this did represent the fifth consecutive day of net purchases via those channels, an outcome not observed since late March. This came even as the CSI 300 lodged modest losses (0.2%), unwinding the early gains that were linked to another run of softer than expected inflation data out of the world’s second largest economy, which intensified the debate surrounding the need for further policy easing.

• Still, moves were not one-way, with the tech sector (HSTECH & ChiNext) lodging modest gains on the session.
• Sino-U.S. relations have received some airtime in the last few hours, with trade tension, focused on the Chinese tech sphere, remaining evident. Most recently, the Chinese Commerce Ministry criticised the U.S. for its actions in discouraging the development of the Chinese semiconductor sector. The Ministry added that 'such behaviours will affect companies' normal operation and damage the international economic and trade order. 'This came after news that China’s Commerce Minister met with the U.S. ambassador to China earlier on Thursday.
• Elsewhere, BBG reported that “Chinese authorities are signaling further support for shares of state-owned firms by hosting a promotional event for new funds, adding fuel to the market’s hottest trade… The event, dedicated to fostering “valuation discovery for central government-owned firms,” has been much anticipated by investors betting on SOEs.”