Light Bid For CSI 300, Latest Stimulus Talk Does Little

MNI (London) - Mainland markets saw a modest bid on Wednesday, with the CSI 300 benefitting from PBoC rhetoric surrounding a potential RRR cut as part of the facilitation of looser credit conditions in a bid to support economic growth (the usual round of credit operations also got some airtime in the comments covered by Xinhua).

• Still, market participants have recently rolled forward/deepened their expectations re: monetary easing, with the levers flagged above very much part of those expectations.
• That, coupled with the lack of immediate delivery and familiarity of these support measures (as well as their recent failure to create a meaningful uptick in economic activity) made for a tepid market reaction, at least for equities.
• That left the benchmark +0.2% on the day.
• The Hang Seng was a touch softer, shedding 0.2%.
• Expectations surrounding Lunar New Year travel supported airlines, with comments from a civil aviation official re: expectations for record travel levels in that window helping. This also helped broader names related to travel.
• Lenovo’s HK listing benefitted from news re: AI PC releases.
• Solar-related names and healthcare/weight loss players benefitted from sector-specific news.
• Names linked to the China Fujian FTZ drew support from policymaker focus on boosting cross-strait cooperation.
• JD.com struggled as the company disclosed “suspicious practices” at one of its units.
• Northbound net HK-China Stock Connect flows were essentially flat on the day, with a miniscule round of net buying (CNY0.2bn) observed.