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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CHINA STOCKS
A quick catchup re: yesterday's rally in Chinese equities (CSI 300 +3.2%, Shanghai Composite +2.4% on the day).
- Tuesday saw Chinese mainland equities benefit from record daily net inflows via the northbound legs of the Hong Kong-China Stock Connect schemes, totalling a net CNY21.7233bn.
- Heavyweight Kweichow Moutai added the best part of 6% on the day, perhaps a sign that some investors were pursuing a flight to quality as authorities look to crackdown on what they deem to be speculative-driven moves in local commodity prices. The rotation out of commodity-linked names also seemed to benefit the tech sector, which could have represented a re-allocation for those still seeking a higher beta exposure. Elsewhere, brokerage names benefitted from news that Shanghai will look to bolster its status as an asset management hub.
- The move coincided with USD/CNY printing at the lowest level witnessed since 2018 (no doubt aided by the aforementioned record level of net daily inflows into mainland equities via the Connect schemes), bottoming out just above CNY6.4000 before RTRS sources pointed to China's major state-owned banks buying U.S. dollars at "around CNY6.4000" on Tuesday afternoon, "in a move viewed as an effort to curb fast yuan appreciation." USD/CNH traded as low as CNH6.3922, despite some (separate) talk of state-owned banks intervening around the CNH6.4050 level earlier in the day, before rallying alongside USD/CNY.
Fig. 1: Net Hong Kong-China Northbound Stock Connect Flows (CNYbn)
Source: MNI - Market News/Bloomberg
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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