Indices Trade Heavily, Hang Seng Registers Fresh ’23 Intraday Low

Benchmark indices traded heavily on Wednesday, with the CSI 300 shedding 0.9% and the Hang Seng 2.1% worse off. Corporate earnings and economic uncertainty were touted as the major drivers once again.

• The Hang Seng breached & closed below the 17,000 mark, hitting the lowest intraday level seen since November of last year in the process.
• Meituan came under pressure for a second day (shedding 12% on Wednesday), with pre-earnings weakness extending on the back of what was deemed to be soft Q4 guidance, resulting in some big-name brokerages slashing price targets.
• International participants broke a run of two consecutive days of net inflows for mainland equities via the HK-China Stock Connect links, shedding CNY5.1bn on Wednesday. This added another element of pressure.
• Copper producers benefitted from the latest rally in prices of the metal.
• On the macro front, continued focus on pro-growth policy and trying to promote capital inflow remained evident via our policy team’s latest insight piece.
• Meanwhile, local press outlets continued to run comments from analysts flagging the potential for lower PBoC policy rates in the face of economic and bond issuance pressure, along with the likelihood for steady growth in money supply.
• Also note that state-backed media stressed that BSE investors must be more cautious after the recent surge in the index, along with the need to pay attention to risks. The index finished 7.3% lower.