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Lower In Asia Ahead of U.S. CPI; China Covid Worry Drives Materials Lower

EQUITIES

Most major Asia-Pac equity indices are lower at typing on a negative lead from their U.S. and European counterparts. Energy and commodity-related equities have broadly declined throughout the session, with worry surrounding China’s well-documented, partial re-introduction of pandemic control measures have sent commodity benchmarks a little lower.

  • The Hang Seng Index deals 0.2% softer at typing, staging a dramatic recovery from session lows near the open at around -3.1%. The Hang Seng Tech Index sits 0.9% firmer at typing, with broader optimism surrounding an easing in China-based tech re: regulatory crackdowns neutralising growth worry from some quarters following an earnings miss from video streaming giant Bilibili Inc (-14.8%).
  • The CSI300 bucked the broader trend of regional peers, trading 0.4% higher and operating around session highs at typing after opening lower. Tech-related names lead the bid, with the ChiNext and STAR50 indices sitting 1.0% firmer apiece. Zooming out, debate re: the “investability” of Chinese equities continues to take focus, with HKEX data pointing to net foreign inflows through the Hong Kong Stock Connect of around CNY26.1bn for the first five days of June - more than that seen in May (CNY16.9bn) and April (CNY6.3bn).
  • The ASX200 sits 1.3% worse off at typing, with energy and material names underperforming. Closely-watched Australian financials are on track for a fifth straight day of losses, although the sub-index has remained clear of Thursday’s 14-month lows through Asia-Pac dealing, aided by marginal gains in the ‘Big 4’ banks.
  • The Nikkei 225 trades 1.4% lower at typing, on track to snap a five-session streak of gains. Major exporters and large-caps have given up some of their recent gains as the JPY has seen a little strength, with broader appetite for equities sapped by COVID-related growth concerns in China.
  • U.S. e-mini equity index futures sit 0.2% to 0.4% better off at writing. The contracts currently operate a little above their respective, recently-made 2-week lows, following a 1.9% - 2.7% lower close on Thursday.
  • Looking ahead, U.S. CPI crosses at 1330 BST.

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