Familiar Sources Of Worry Return After Thursday’s Late Rally

MNI (London) - The major China-related benchmarks couldn’t extend on Thursday’s late rally (plenty of speculation re: state-backed buying on Thursday remains evident), with the CSI 300 -0.2% at the close of Friday trade, while the Hang Seng finished 0.5% softer.

• Familiar sources of economic worry dominated when it came to narratives surrounding the space.
• On that front, a recent RTRS sources piece noted that “China has instructed heavily indebted local governments to delay or halt some state-funded infrastructure projects, as Beijing struggles to contain debt risks even as it tries to stimulate the economy.”
• Also note that official data appeared to point to an 8% Y/Y fall for FDI into China in ’23.
• A BBG source report, suggesting that China’s largest brokerage (Citic Securities) has “suspended short selling for some clients in mainland markets amid a deepening rout in the nation’s stocks” did little when it came to boosting wider sentiment.
• Domestic discussions seemed to centre on the need to promote consumption and speculation surrounding which methods policymakers may deploy on that front.
• Regional Apple suppliers benefitted from Thursday’s uptick in the shares of the U.S. tech giant.
• TSMC rallied on a combination of earnings and guidance, with the TAIEX moving higher as a result (+2.6% for the index).
• The HK-China Stock Connect schemes generated a sixth consecutive day of net outflows from the mainland, with a net ~CNY5.2bn of mainland shares sold via those channels on Friday.