CSI 300 Reverses Early Losses, HK Tech Struggles

The CSI 300 more than reversed an early sell off to finish +0.7%, while the Hang Seng was -2.6%.

• The lack of announcements re: immediate, overt policy support at the NPC probably disappointed some during early trade.
• That was before the solidifying of easing expectations on the back of long end special bond issuance and a steady ’24 GDP growth target (“around 5%) provided support.
• Elsewhere, ETF activity had some pointing to state-backed buying.
• HK tech names struggled after the U.S. Commerce Department announced it will bar exports of AI processors made by AMD to China. Hang Seng Tech Index -4.3%.
• Some mainland chip names pared losses after China stressed the need for self-reliance in the sector.
• Property sub-indices struggled as Country Garden saw the largest sales drop in seven years amid wind-up fears.
• Elsewhere in the sector, Vanke’s equities and bonds have plunged in recent days as investors grow concerned over the company’s ability to continue servicing debts (despite attempted assurances from the name).
• Some EV names benefitted from new regulatory criteria in the sector.
• Defence names rallied on confirmation of increased Chinese military spending.
• More broadly, Goldman Sachs’ wealth management executive expects China's three pillars of growth (property, infrastructure & exports) will weaken over the next decade. This resulted in the name cautioning investors re: adding exposure.
• Net northbound Stock Connect flows saw CNY1.6bn of mainland inflows.