Chinese equities saw a brief rally upon reopening after the week-long holiday, but the surge quickly faded as investors doubted Beijing's commitment to further stimulus. The CSI 300 Index is trading 4.5% higher after an initial 11% jump, while the HS China Enterprises Index plunged by as much as 11% it has stabilized somewhat to trade 7.50% lower, marking its biggest one-day drop in 16 years. The HSI also fell by up to 10%, its steepest decline since 2008.

• The moves look like profit taking and a rotation into mainland Chinese stocks, driven by expectations of domestic liquidity stimulus. The National Team" is likely driving the A-share (onshore) market, alongside stimulus efforts.
• China onshore equities mostly remain in the green at the moment, with Tech thee top performing sectors with CSI300 Tech Index  +10.45%, while Utilities are the worst performing trading -0.80%.
• Volatility has continued to spike, even with Hong Kong listed equities fall with 30-day vol at levels not seen since 2022, see chart.
• China's recent measures to revive its housing market have sparked immediate interest, with sales and increased buyer activity reported during the nation's week-long holiday. Cities offering promotions saw homebuyer visits rise by at least 50% compared to last year. In cities like Beijing and Shenzhen, sales surged, with some buyers making purchases without even viewing properties. Authorities announced policies like lowering mortgage rates and down payment requirements.
• Property stocks have surged in the past few weeks, with many names up over 100%. The news of increased sales however has done little to keep equity prices at those elevated levels with the Mainland Property Index falling 11.50%.

Chart. HS China Enterprise, 30-day Vol spike