Hang Seng Tech & HS China Enterprises Index Rebound +4%

Asian stocks are tracking higher in the first part of Friday's dealings. Much of the focus remains on gains for Hong Kong stocks, the HSI up over 3.6% at the break. The tech sub index is tracking more than 5% higher. The HS China Enterprise index is +4.2%.

• China mainland shares are also firmer, albeit with a lower beta, the CSI 300 +1.3% at the break. Japan stocks are +1.3% for the Topix. Taiex +1.4%, the Kospi +1.0%, while SEA markets are more muted.
• In terms of drivers of these moves, there doesn't appear to be a single catalyst. As we noted earlier the Golden Dragon rallied 4% in US trade on Thursday, so some positive spillover is clearly evident. This was amidst broadly positive gains in US/EU bourses, with the viewpoint of a Fed pause in June helping sentiment.
• Goldman Sachs is keeping its MSCI China OW but lowering the price target, is another positive. Value buyers may also be emerging given the extent of recent sell-offs (i.e the HSI and HS China Enterprise Index both moving 20% off Jan highs).
• Possible stimulus expectations could also be driving market sentiment, it the aftermath of this week's mixed PMI data.
• We have seen some positive spillover to US equity futures, Eminis last close to +0.20% (4235/36), while Nasdaq futures are +0.25%. The US Senate passed the debt-ceiling agreement, which is expected to be signed by President Biden. This didn't bring any meaningful shift in equity sentiment though.