Hong Kong & China Equities Rebound After Wednesday Sell-Off

Hong Kong and China equities opened higher on Wednesday only to close the day down 1-3%, after the Hong Kong budget underwhelmed investors. The only clear winner from the budget was the property sector, with the measure expected to boost volumes are prices hit a seven-year low. Corporate earnings will be the major focus looking ahead, Baidu was out on Wednesday with mixed earnings after profits plunged 48% as AI costs hurt bottom line.

• Equities markets are opening mostly higher today, after their sell off on Wednesday. Mainland Property Index is the top performer this morning up 1.10%, although the index was 3.80% lower Wednesday. HSTech Index is unchanged earlier, while the wider HSI is up 0.30% lead higher by Financial with HSBC up 1.30%. In China growth stock are leading the way higher, with the CSI1000 up 2.00%, while the CSI300 trade 0.70% higher.
• China Northbound flows were +1.3b yuan on Wednesday, with the 5-day average now 3.1b, while the 20-day is at 2.81b yuan.
• JPM was earlier out recommending investors Sell into any strength in Hong Kong Property Developers after the government announced it will be scrapping property curbs, as they view the easing will boost volumes, but home prices will continue their trend lower.
• China’s securities regulator (CSRC) will look to restrict Quant trading strategies that have been seen to be responsible for recent market turmoil, and guide funds in controlling the size and leverage of their DMA businesses.
• Major companies with earnings due out today include Budweiser Brewing Co APAC, HK Exchanges & Clearing and NetEase. NetEase will be the most closely watch after they have recently had gaming content approved.
• Looking ahead, Hong Kong has Budget Balance & Money Supply data out.