MNI (London) - Benchmark indices struggled on Tuesday, as deeper property market worry in the wake of the Evergrande liquidation order in HK and a combination of continued economic fear/want for policy and equity market-specific support, provided headwinds.

• The CSI 300 was 1.8% worse off, while the Hang Seng lost 2.3%. both remain a little above YtD lows owing to last week’s rally.
• Details of Hong Kong’s plan re: new security laws also seemed to weigh.
• Media outlets tried to play down worry surrounding the Evergrande situation, pointing to limited impact for Evergrande’s unfinished housing projects and the rights of onshore bond holders.
• However, worry about the precedent set by the move and the situation for offshore bondholders, in addition to potential shockwaves through the sector, seemed to dominate.
• Chinese builder Radiance announced its intentions to hold meetings with March 2024 bondholders, with that line trading at ~$0.65 on the dollar.
• Note that Vice Premier He stressed the need for cities to follow through on national guidance re: property developer funding on Monday.
• There were also reports pointing to the potential for banks to extend loan periods for some property projects.
• BYD struggled after softer-than-expected earnings data.
• Sands China moved lower after a negative brokerage move.
• Electricity providers seemed to benefit from expectations surrounding demand related to cold weather.
• Lower Chinese yields (benchmark 10s breached their ’20 COVID low) did little to support equities.
• International flows were supportive at the margin, with modest net inflows for the mainland (CNY1.7bn) lodged via the HK-China Stock Connect links.