Fresh Lows For CSI 300 & Hang Seng

MNI (London) - Chinese equities struggled on Wednesday, with the CSI shedding 2.2% and the Hang Seng 3.7% lower.

• Both indices registered fresh ’24 lows in the process. The CSI 300 move saw fresh multi-year lows, while the Hang Seng has not managed to challenge it’s ’22 base.
• Meanwhile, a mixed round of Chinese data (soft retail sales and home price data provided the most meaningful downside surprises) did little to counter worry.
• Desks flagged the data and inaction from the PBoC re: the interest rate applied to this week’s MLF operations as a cocktail that promoted capitulation on Wednesday.
• International flows also factored into the move lower, with the mainland experiencing CNY13.1bn of net outflows via the northbound legs of the HK-China Stock Connect schemes, the largest round of daily net sales seen since Oct ’22.
• The unwind of some of the cuts priced into U.S. STIR markets and negative leads for global equities were touted as meaningful external factors.
• Elsewhere, option barrier-related flow was once again highlighted as a downside catalyst when it came to the Hang Seng.
• The soft Chinese house price data provided headwinds for property names, which would have reverberated more widely.
• Worry re: the reluctance of state banks to lend to private property developers (flagged by desks and broader wires) was another negative for the sector.
• Price target cuts for major airlines from HSBC weighed on that sector.
• Tencent struggled on a similar price target move from HSBC.
• BYD struggled on the back of analysts warning of a long and challenging journey for the name.