The largely as-expected Chinese consumer/producer price data out at the market open appear to be a non-factor so far.
The big mainland Chinese banks are broadly softer, with Agricultural Bank of China down 1.8%, China Construction Bank down 1.4%, and ICBC down 2%. Late yesterday, local newspaper First Financial Daily said that new non-performing loans for the first two months of the year already total about 60% of bad loans for all of last year.
The losses come after solid gains made in recent weeks, and J.P. Morgan is saying that advance may have another month or so to go before running out of steam.“We see increasing stress on asset quality, particularly in shadow banking, as interest-payment pressure is rising, while collateral value may decline,” the report quoted J.P. Morgan as saying.
Casinos are also a soft spot: Sands China is down 3.1%, and Galaxy Entertainment is down 2.1%, while outside the Hang Seng Index, MGM China and Wynn Macau are 2% lower each.
And the tech names are also understandably weak, given a 3.1% plunge in the Nasdaq on Thursday. Index heavyweight Tencent Holdings is down 4%, while Lenovo is off a more modest 0.7%.
On the upside, yesterday’s news that China will soon allow foreign investors to buy mainland Chinese stocks via Hong Kong is offers some spectacular gains for a few names that stand to benefit. Bourse operator Hong Kong Exchanges & Clearing is up 10.5%, while broker First Shanghai Investments is 11.9% higher.
Strength in some commodities are also helping a few metal plays, with Zijin Mining up 2.7% as gold hit a 2-1/2-week high, while Jiangxi Copper is 2.2% higher.
As for the mainland markets, the Shanghai Composite is down 0.3% after opening 0.1% lower.