Mostly Lower In Asia; Hong Kong, China Outperform As Commodities Lag

Asia-Pac equity indices are mostly lower at typing following a mixed lead from Wall St. Commodity-linked equities region wide have borne the brunt of the selling pressure amidst broad weakness in major commodity benchmarks (BCOM: - 2.7%), with the MSCI Asia Pacific Index on track to decline for an eighth straight session.

• The CSI300 outperformed peers, trading 0.7% higher and operating a little below session highs at typing. The PBOC’s decision to hold the 1-year and 5-year LPRs steady came largely in line with expectations, with debate re: the possibility of further cuts later in ‘22 doing the rounds in Asia. Richly-valued consumer staples, tech (ChiNext: +2.4%), and healthcare stocks lead gains in the index, easily outpacing losses in energy and materials names amidst aforementioned weakness in commodity benchmarks.
• The Hang Seng Index sits 0.2% better off after reversing earlier losses on strength in real estate, seeing the Hang Seng Properties Index adding 3.5% at writing. China-based tech struggled, with the Hang Seng Tech Index sitting 0.5% weaker, weighed by a steep selloff in NetEase (-7.7%) after the company announced a delay to the Chinese launch of the closely-watched video game Diablo Immortal.
• A Reuters source report last Friday pointing to the PBOC accepting an application from the Ant Group to set up a financial holding company was rebutted by source reports to the contrary from China’s Yicai on Friday as well, effectively negating optimism spurred by the RTRS report (Alibaba’s U.S. ADRs gained as much as ~11% on the open of the NY session before paring most gains). The development thus provided virtually zero tailwind to the space on Monday, against prior expectations from some quarters.
• The ASX200 sits 0.5% worse off at writing, with losses in material stocks contributing the most drag to the index. Major miners such as Rio Tinto (-5.0%), Mineral Resources (-6.0%), and BHP Group (-4.1%) fell on the open amidst a well-documented sell-off in iron ore futures early on Monday, with iron ore on track for an eighth straight day of declines on worry re: China’s COVID-related economic outlook, and signs of weakness in the Chinese property market. The S&P/ASX All Technology Index deals 0.8% higher at writing by comparison, flipping above neutral levels on strength in index large-caps such as Block Inc and Xero Ltd.
• U.S. e-mini equity index futures are flat to 0.5% better off at typing, having pared gains from ~1.0% near the open.