Little Changed At The Index Level, Property Struggles, Regulators Attuned To Market Risks

The CSI 300 traded either side of unchanged on Wednesday, ultimately adding less than 0.1% come the close.

• A slightly softer than expected headline Chinese CPI reading (largely driven by food prices) promoted competing market forces via the soft domestic demand/increased chance for further policy loosening channels.
• Property developers struggled after Ping An Insurance stressed that it doesn’t plan to acquire troubled developer Country Garden.
• That rebuttal was not enough to promote a recovery in Ping An A- & H-shares, which continued the rumour-induced move lower, albeit with the name closing off worst levels.
• Solar equipment manufacturers benefitted on hope for government intervention in the space, after overcapacity weighed on profits/margins.
• Since the close, RTRS sources noted that “China's securities watchdog is asking brokerages to restrict leverage available to hedge funds that borrow large sums of money via a complex derivative business to trade stocks.” The piece went on to flag that “a source at one of China's big brokerages confirmed the guidance, citing regulators' concern over market risks.”
• Elsewhere, a commentary piece in the state-owned press stressed that investment banks should provide stability via medium- to long-term capital deployment, as opposed to profit chasing in markets.
• Meanwhile, the CSRC attempted to placate offshore worry re: capital outflows and equity markets via forum event.
• Net HK-China Stock Connect flows were essentially neutral for mainland equities today, titled towards very modest selling (~CNY0.6bn).