Lower, Support Steps & Rumours Limit Losses

Chinese equities followed global peers lower Friday, although mainland benchmarks were relatively resilient (CSI 300 -0.4%). The CSI 300 sits just off ‘23 lows.

• Tech benchmarks fared worse given the losses in the NASDAQ 100.
• A relief rally surrounding relaxation of mortgage restrictions for some Chinese citizens quickly faded, owing to widespread expectations for such a step.
• Elsewhere, RTRS sources suggested that regulators floated a draft proposal for a stamp duty cut covering equity transactions. This comes after reports of commission cuts across several major brokerages.
• Morgan Stanley lowered price targets for benchmark Chinese and HK equity indices for the second time in three months.
• Flows via the HK-China Stock Connect schemes reverted to net sales of mainland stocks on Friday after Thursday’s net purchases broke the record streak of outflows.
• Capital flows surrounding China receives increasing interest, with Premier Li Qiang flagging the need for efforts to attract foreign capital.
• We also highlight RTRS sources suggesting that the PBoC “has asked some domestic banks to scale back their outward investments through the Bond Connect scheme.”
• The CSRC is set to meet with global investors at some point today, after attempting to promote capital inflow from domestic institutional investors earlier this week.