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Weaker China Property Developers Weigh On the HSI, More Positive Moves Elsewhere

EQUITIES

Regional equities are mixed to start the week. HK and China markets are again a soft point but there are positive signs elsewhere. US equity futures have traded tight ranges so far and sit close to flat. Eminis were last around 4564, down a touch, while Nasdaq futures were ear15547.

  • Hong Kong's HSI has been the main regional drag. The index sits down 1.40% at the break. Property related names have been hit, with a sub-index gauge for the sector down nearly 2.90%. Country Garden has fallen after J.P. Morgan cut the company to UW, owing to liquidity concerns for private sector developers. The company also doesn't see last week's urban development announcement as shifting the property sector narrative.
  • Mainland indices are mixed. The CSI down 0.25% at the break, while the Shanghai Composite is slightly higher. China's State Planner announced released measures to boost private sector investment today (see this link for more details).
  • The Kospi has outperformed up 0.40% at this stage, although is away from earlier highs. Posco has surged on better earnings and positive investor sentiment around the electric-battery vehicle outlook. The Taiex is close to flat, despite a rebound in the SOX during Friday US trade.
  • In Japan major indices are higher, with the Topic near +0.85%, while the Nikkei 225 is close to +1.35% firmer. Late last week, news wires reported the BoJ was likely to hold steady this week in terms of YCC. Bank names have underperformed somewhat, but sectors linked to a weaker yen (such as autos) and the electrical appliance sector have rallied.
  • In SEA trends are mostly positive except for Singapore shares. Gains elsewhere are under 0.50% at this stage.

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