Hong Kong/China Shares Surge Post Politburo Meeting

The main focus today has been on the surge in China related equities following details of yesterday's Politburo meeting. The HSI is up over 3% at the break, the CSI 300 +2.6%. Most other markets in the region are in the green, although Japan stocks have lagged. US equity futures have been quiet, with Eminis sitting close to flat, last around 4583, likewise for Nasdaq futures.

• At the break, the HSI sits just below session highs above 19300 (last 19258.66). The simple 200-day MA is nearby (19272.67), so market participants may watch to see if we can close above this resistant point. The tech sub index is +4.61%, while the Mainland Properties Index is +11.31% (after falling 6.4% yesterday). Developer Country Garden also stated it had repaid all the bonds interest and principal on time (following recent volatility in the company's bonds).
• Market sentiment has been buoyed by the Politburo meeting outcome, which recognized the challenges facing the Chinese economy, particularly in terms of insufficient domestic demand. There is also scope for greater housing support, with the meeting dropping the line 'houses are for living in, not speculation'.
• The Mainland CSI 300 is +2.6% at the break (moving back above 3900 in index terms), while the Shanghai Composite is +1.89% higher.
• Japan stocks have lagged, with the major indices tracking lower at this stage. The Taiex is up by over 1.2%, aided by TSMC pans for fresh investment in an advanced chip plant in Taiwan. The Kospi is +0.15% firmer at this stage.
• Most SEA markets are higher, although gains are less than 1% at this stage. Thai stocks are only slightly higher, as on-going political uncertainty weighs at the margins. Indian stocks are close to flat in early trade.