On The Backfoot, Again

The CSI 300 closed below 3,700, nearing ’23 lows (-0.6%), while the Hang Seng printed at the lowest level seen since November (closing -1.5%), as did the HSCEI.

• Well-documented Chinese economic headwinds remain evident, pressuring equities. The latest survey from the Securities Times indicated Q3 GDP growth levels of sub-5%, although there seems to be continued hope of an economic rebound in Q4, keeping the official ’23 GDP target of around 5% in play.
• Property developer names continued to struggle, with a BBG index monitoring Chinese property developers retesting YtD lows.
• Flow wise, we saw another day of net selling of mainland equities via the HK-China Stock Connect schemes (~CNY6.3bn).
• Participants are now generally focused on Chinese economic performance during the impending Golden Week holiday period, which will see mainland markets closed from the end of Thursday trade through next week.
• Official PMI data will cross on Saturday, with the Caixin equivalents due to hit on Sunday.