Hong Kong Equities Edge Slightly Higher, Yellen To Visit China

Hong Kong and China equities are mixed today, with HK equities slightly outperforming. Focus this week will turn to corporate earnings as economic data is light. Earnings from Country Garden and China Vanke will be particularly closely watched as investors wait to see the extent of China's property woes, while earnings from Chinese banks will also shed some light on where the market is heading. It has been announced that Treasury Secretary Janet Yellen will visit China in April to meet with the country's senior leaders.

• Hong Kong equities are slightly outperforming China equities today. The Mainland Property Index has recovered after being down as much as 1% earlier and now trades up 0.50%, while HSTech is down 0.20% after plummeting as much as 4.35% on Friday. The wider HSI has just turned positive, up 0.12%. In China, all indices look lower. The CSI300 has been unable to really test major resistance of the 200-day EMA and is down another 0.21%, while the smaller cap CSI1000 is down 0.70%.
• China Northbound flows were -3.1billion yuan on Friday, with the 5-day average at 1.55 billion, while the 20-day average sits at 2.27 billion yuan.
• Chinese Premier Li Qiang assured investors of Beijing's commitment to addressing economic challenges by stepping up policy support to stimulate growth, citing low consumer price growth and manageable government debt levels. Despite positive economic indicators, including strong exports and industrial production, longer-term challenges such as deflation, a property downturn, and low foreign investment confidence persist, prompting a focus on boosting domestic demand and advancing strategic industries.
• Apple Inc. is reportedly considering using Baidu Inc.'s generative artificial intelligence technology in its devices within China, marking a potential collaboration between the two tech giants in the tightly regulated Chinese market. Baidu's expertise in AI could provide Apple with a significant advantage, with discussions ongoing as Apple explores partnerships with various AI providers for its products, similar to its arrangement with Google and OpenAI for search functionalities.
• Fears of a slowdown in Chinese luxury spending have impacted fashion giant Gucci, leading to a nearly 20% decline in sales this quarter, particularly in the Asia-Pacific region. This contributed to a $9 billion market value loss for Gucci's parent company, Kering SA. The broader luxury industry is also feeling the effects, with Swiss watch exports to China tumbling and analysts predicting further cooling of luxury demand in the country.
• Looking ahead, it's a quiet week for China econ data, while Hong Kong has Trade Balance data out on Tuesday.