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HK/China Equity Falls Take Shine Off Rebound


Losses across Hong Kong & China shares have taken the gloss of what looked like a promising start to the week for regional equity markets. US futures opened up strongly, with Eminis above 3800 at one stage but we are now back close too flat (3765/70). This curtailed gains for the major Asia Pac indices. Note several markets have been closed today due to holidays - Singapore, Malaysia, Thailand, India and NZ.

  • China related markets were down sharply in early trading. The HSI China enterprise index off more than 5.5, the CSI 300 around 1.75%.
  • Markets assessed the revamped line-of the party leadership, as well expectations of a continuation of recent policies, such as the dynamic covid zero policy.
  • Higher covid case numbers in Guangzhou, which is a manufacturing hub, has prompted fresh restrictions for this district as well. Q3 GDP for China beat estimates, but retail spending, housing investment & prices disappointed for September.
  • The HSI saw negative spill over as well, down 5% for the headline index, -7.7% for the tech sub-index.
  • The Kospi (+0.75%) & Taiex (+0.45%) have fared better, following positive leads from US tech names late last week. South Korean markets were also supported by fresh measures to support local credit markets, following a recent payment miss, which unnerved confidence in the sector.

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