Softer Despite China GDP & Retail Sales Beat

Mainland China equity benchmarks were lower overnight, even with Q3 GDP coming in firmer than expected (triggering some full-year GDP growth projection upgrades from the sell-side).

• The CSI 300 was 0.8% lower, while the Hang Seng lost a shallower 0.2%.
• Elsewhere, monthly Chinese economic activity saw firmer than expected retail sales data, while industrial production was loosely in line with exp. FAI & property investment data was a touch softer than exp.
• This data adds to the economic bottoming out narrative and perhaps points to an incrementally lower need for policy support (although continued easing is generally expected in the months ahead), which may have provided some headwinds.
• Also, continued worry re: well-documented areas of China-specific risk remained evident post-data.
• A further uptick in geopolitical angst wouldn’t haven aided broader sentiment.
• A seemingly impending potential USD bond coupon payment default from Country Garden also weighed on broader property-related sentiment. The CSI 300 real estate index was 1.3% softer, outpacing losses seen at the headline index level.
• Northbound HK-China Stock Connect flows remained in net selling territory re: mainland shares, although the pace moderated to ~CNY1.2bn.