Asian equities experienced a mixed trading session overnight, with most markets showing gains except for Thailand. Hong Kong remained flat, while all sectors in Mainland China saw positive movements based on the MSCI China All Shares Index constituents. The Mainland market has been trailing behind Hong Kong in recent sessions, possibly due to local investors awaiting further stimulus indications from the upcoming Third Plenum.
Market analysts are anticipating the release of China's official consumer price index (CPI) and producer price index (PPI) tomorrow. Expectations suggest a rise in CPI driven by surging pork prices, while PPI is forecasted to decline, potentially influenced by slowing external demand.
Internet stocks rebounded, with Tencent and NetEase posting gains, although Meituan saw a decline despite a significant share buyback. Bilibili outperformed, buoyed by positive first-quarter results. Alibaba and JD.com showed mixed performance.
Ping An faced a drop as the company considers a substantial convertible bond offering. Government strategist Wang Huning emphasized the need to strengthen 'internal circulation,' including consumer spending, ahead of the Third Plenum meetings.
Goldman Sachs strategists expressed bullish sentiment towards China small cap stocks, citing low valuations, liquidity, and industry composition. Rumors suggest the National Team may intervene in small cap index ETFs, with the China Southern 1000 ETF witnessing heightened turnover.
In Hong Kong, the Hang Seng and Hang Seng Tech indexes closed flat and slightly higher, respectively. Mainland investors showed interest in Hong Kong-listed stocks and ETFs via Southbound Stock Connect. Information Technology, Materials, and Industrials were the top-performing sectors, while Energy, Utilities, and Real Estate lagged.
Shanghai, Shenzhen, and the STAR Board all closed higher, with Information Technology, Consumer Discretionary, and Financials leading the gains. Health Care, Energy, and Consumer Staples were among the sectors that showed weaker performance.
Overall, the market dynamics reflect a cautious yet optimistic sentiment as investors await key economic data releases and policy signals from the upcoming Third Plenum meetings.
