Japan Markets Recoup Early Losses, China Equity Weakness Extends

Regional equities are mixed in Thursday trade to date. On the downside China equity losses are a standout, with the CSI 300 down 1.40% at the break. Japan markets, on the first trading day of 2024, have pared losses as the session progressed. US equity futures sit marginally higher at this stage. Eminis were last near 4751, +0.10%, with Nasdaq futures up by a similar amount.

• The CSI 300 is off by 1.4% at the break. Sentiment not buoyed by a much stronger than expected Caixin services PMI result. Aggregate markets continue to unwind the late 2023 rally.
• The real estate sub index is down a further 2.40%, making fresh cyclical lows, with little respite for the under pressure sector. Fitch downgraded the outlook for a number of China national asset management companies on expectations of reduced government support.
• The HSI is off nearly 0.50% at the break.
• Japan markets opened lower, playing catch up to the softer global equity trend since the start of the year, but we are comfortably away from lows. The Topix sits +0.30% higher, the Nikkei 225 down -0.75%. Weaker yen levels are likely helping at the margin, although airline stocks have been pressured in the wake of the recent crash.
• The Kospi continues to correct lower, off a further 0.90%, while the Taiex in Taiwan has seen a more muted fall (off 0.15%).
• In SEA, Philippines stocks have outperformed, up 1%. The bourse will reportedly offer new products to retail investors, while IPOs are expected to rise this year (see this link). Trends are mixed elsewhere.