Sharp Reversal In Hang Seng Noted After Soft Start

Notable swings in the Hang Seng marked the start to ’23 trade, with participants weighing up economic growth headwinds for China (and the degree of policy support required), slumping property sales in both the Chinese mainland & Hong Kong, worries surrounding the restructuring of property giant Evergrande and the PBoC’s drain of year end-related liquidity provisions. The benchmark index shed over 2.0% in early trade, but now sits 1.7% higher on the day.

• Elsewhere, gains for the CSI 300 were much more marginal, last printing +0.2% in afternoon trade.
• Speculation surrounding the need for greater policy support in China seemed to provide the impetus for a recovery at a macro level. Meanwhile, casino names provided a pocket of micro strength.
• Australia’s ASX 200 suffered from worry re: China, shedding more than 1%.
• E-minis were subjected to notable two-way flows, initially more than unwinding early gains, before bouncing alongside the Hang Seng. The major e-mini contracts are ~0.2% higher as we head into London hours.