Hang Seng Gaps Down Again; Chinese Stocks Gain As Support For SMEs Outlined

Most Asia-Pac equity indices are in the red on a negative lead from Wall St., with the MSCI Asia Pacific Index tipped to close lower for a seventh straight session.

• The ASX200 sits 1.4% weaker at typing, paring earlier losses of ~2.5% (fresh three-month lows at the time). Steep losses were seen in major mining stocks with the ASX200’s materials and energy sub-indices leading losses, tracking broad declines in major commodity benchmarks. Australian tech equities fared a little better as seen in the S&P/ASX All Technology Index trading 0.2% lower at writing, although notable losses in index heavyweight Block Inc (-12.8%) largely neutralised gains elsewhere in the sector.
• The Hang Seng Index is on track to close in the red for a fourth straight session, sitting 2.8% lower at typing, led by weakness in China-based tech stocks. The Hang Seng Tech Index correspondingly sits 4.7% worse off, with steep losses seen in large-caps JD.com (-9.7%), Tencent Holdings (3.7%), and Trip.com (-7.4%). Headlines proclaiming the exit of global investors from Chinese equities have been gaining momentum in recent weeks, with titan BlackRock reported on Monday to have changed their previously bullish stance, citing growth risks from pandemic control measures. Regulatory measures imposed by the Chinese authorities on internet live streaming platforms over the weekend again sparked debate re: recent pledges for regulatory reprieve and targeted support towards internet platform companies.
• The CSI 300 was the sole major Asia-Pac index to notch gains, sitting 0.2% firmer at typing, reversing earlier losses after opening at two-week lows (~1.5% lower). The bid in Chinese equities came largely after the State Council and PBOC issued guidance supportive of SMEs, with the former outlining that local authorities should provide small businesses with subsidies for rent, utilities, and insurance, while also highlighting separate (but related) guidance to banks in areas such as loan extensions and forex hedging.
• U.S. e-mini equity index futures deal 0.3% to 0.8% firmer at writing after hitting fresh cycle lows earlier in Asia-Pac dealing, with Nasdaq contracts trading around levels last witnessed in end-’20.