State Buying Provides Brief Respite, Hang Seng Then Tumbles To Fresh ’23 Lows

The CSI 300 recovered from session lows, closing 0.4% softer. Reports of state buying of ETFs provided the catalyst for the afternoon bounce, although the move ultimately ran out of steam and faded a little in the close, with the index trading below parity all day.

• The Hang Seng was softer, closing -1.3% after an accelerated pullback from recovery highs, making fresh session lows into the close. Zooming out, the index registered fresh YtD intraday and closing lows in the process, but still operates some way above the ’22 base.
• A firmer-than-expected Caixin manufacturing PMI release did little for sentiment, with continued headwinds for the property sector outweighing.
• Some major banks have held meetings with major property developers to better understand their financing needs. This promoted further talk re: a fresh leg of support for the sector, although Yicai sources noted that authorities have not issued an official "white list" or ordered banks to increase their proportion of real-estate loans
• Elsewhere, media outlets stressed that the CNY50bn private fund to be set up by two major Chinese insurers to invest in listed companies is meant to help stabilise the stock market, per comments from regulators.
• Chinese EV names struggled after BYD announced a raft of initiatives to boost December sales.
• Alibaba struggled in HK trade. That came after a brokerage downgrade for its U.S. listing, which included warnings re: the speed of the business turnaround.
• On the flow side, mainland equities saw a net CNY5bn of outflows via the HK-China Stock Connect links.