Under Pressure On Earning Results, Broader Growth Concerns

China related equity markets are under pressure in the first part of Friday trade. The HSI is off around 1.65%, close to session lows, while the China Enterprise index is down around 1.9%. On the mainland, the CSI 300 is tracking down nearly 1%.

• Some disappointing earnings results, led by China chipmaker SMIC has weighed (see this from SCMP). The HSTECH index is off nearly 3% in trade to date.
• Note that Northbound stock connect outflows have been evident in the first part of trade, -5.3bn yuan.
• The CSI 300 sits slightly lower than closing levels from last week. Recent data outcomes have raised further question marks on the strength of the economic recovery.
• A short while ago headlines crossed on RTRS from PBOC advisor Wang Yiming. He stated that China can still achieve its growth target this year, but noted that domestic demand remains under pressure given a weak consumption recovery. The fiscal deficit ratio can be raised next year as well he noted.
• This followed earlier comments from PBoC Governor Pan (BBG), which reiterated that the central government is paying close attention to local government debt risks in some provinces, while broader property risks remain manageable.