Weaker China Property Shares & Caixin PMI Miss Weigh On Broader Regional Rally

The early positive regional equity tone has given way to more caution as the Tuesday Asia Pac session has progressed. Hong Kong equities have given up strong earlier gains and now sit back around flat at the break. US equity futures are in positive territory, but down from session highs. Eminis were last around 4617.5, earlier highs printed near 4622. Nasdaq futures have followed a similar trajectory.

• The HSI was +1% higher at one stage, aided by a +2% gain in the tech sub index. Weaker sentiment in the property sector has weighed though, this sub index is down 0.82%, tracking lower for the second straight session. Financing concerns at developer Country Garden have weighed, while Bloomberg noted that China's home sales dropped the most in a year in July.
• The CSI 300 has also given up earlier gains, to sit slightly weaker at the break. The Shanghai Composite is up slightly. Outside of the above headwinds we did see the Caixin Manufacturing PMI print weaker than expected. Still, July was the strongest month for Stock Connect inflows in 6 months, with Hong Kong investors buying just over $6.50bn of mainland shares.
• South Korean shares are higher, albeit away from best levels. The Kospi +1% higher, amid mixed data but a positive lead from major indices in US Monday trade. The Taiex is slightly higher, +0.20%, while Japan shares are +0.50% for the Topix.
• in SEA trends are mixed, with Indonesian and Malaysia shares lower. The Philippines is firmer through by +0.50%. The BSP expects lower inflation pressures in July (data due this Friday) and yesterday saw very large offshore inflows (+$270mn).