CSI 300 More Than Reverses Early Gains, HSI Firmer

Major China-linked benchmarks were mixed on Thursday.

• The CSI 300 shed 0.5%, coming under pressure late in the day, giving back all of the opening gains and more. The index recorded the lowest closing level of the cycle.
• Meanwhile, the Hang Seng added 1.1%, finishing comfortably shy of its early peak.
• The dovish impetus provided by the Fed was the driver of the early moves higher.
• Weaker than expected aggregate credit & money supply data (released after market hours on Wednesday) and the arrest of an ex-development bank VP were touted as two of the more overt headwinds for mainland stocks.
• Meanwhile, researchers continued to push the need for an enhancement of consumption, along with the need for a “revitalisation” of financial resources.
• After hours we saw Beijing cut downpayments on first- and second-home purchases, in the latest leg of support for the troubled space.
• More granularly, policy support allowed tourism-related names to firm.
• Hong Kong property developers gained at the sub-index level, with feedthrough from the dovish Fed takes supporting there. Conversely, the CSI 300 property sub-index was lower on the day.
• HK-China Stock Connect flows were a positive for the mainland, with a net ~CNY3.5bn of purchases seen on the day. That broke a streak of 3 consecutive days of net sales, which included the largest round of daily net sales seen since October.
• Monthly economic activity data and the PBoC’s latest round of 1-Year MLF operations present the scheduled mainland highlights ahead of the weekend.