Friday's fall in Chinese stocks has....>

CHINA STOCKS: Friday's fall in Chinese stocks has been easily recovered in the

Asian morning session, with all of China's main indices gaining in excess of

1.5%. The small cap heavy Chinext index is outperforming again, up another 2.5%

on the day as the Feb gain rises to 13%. The CSI300 has recovered the 200-dma

and the 3400 level to strengthen the rally.

- Positive headlines regarding US-China trade talks on Friday have helped to

recover losses, while the PBOC dovish stance is beginning to feed through into

the headline money supply data. 

- The PBOC's comments at Friday's monetary supply briefing suggested that the

bank does not see the current monetary stance as being loose, despite the record

high new loan figure and recent efforts to recapitalise the banking system via

the central bank bill swap arrangement.