Major Indices A Touch Lower Tuesday

The CSI 300 showed either side of unchanged on Tuesday, eventually finishing 0.2% lower.

• A bid in Chinese EV makers, linked to demand expectations, helped limit losses.
• A bid in Chinese property developers, after RTRS sources noted that “Country Garden won approval from its creditors to extend repayments on six onshore bonds by three years,” also helped.
• On the other hand, a notable brokerage downgrade for some insurers weighed on that sector.
• Elsewhere, although fear re: the Chinese economy has moderated a little, the latest RTRS poll pointed to Chinese GDP growth of 5% in ’23, down from the prior 5.5%.
• On the stimulus front, our policy team’s discussions with a former PBoC MPC member pointed to the need for more aggressive expansionary Chinese macroeconomic policies, including fiscal spending and rate cuts
• Previously outlined regulatory changes resulted in a multi-year high when it came to the increase in equity margin debt on Monday.
• Tuesday saw marginal net outflows (~CNY2bn) for mainland equities via the HK-China Stock Connect schemes.