Oof. The Hang Seng has gone from being up by over 1.5% to being down by 0.5% on the day as Chinese equities have pared early gains in a case of buy the rumour, sell the fact it seems.
That said, it still doesn't take away from the surging rally since November as re-opening optimism helped to calm investor nerves. But the question now is what happens next when markets have come to terms with China putting an end to its zero-Covid policy?
When you look at the big picture, there will still be positives for China's domestic prospects on investment flows as a result of the changes in dealing with the pandemic.
However, the inflation story will continue to be something to be wary about and if this is the big boost that equities were relying on to turn the corner, it hasn't been all too impressive honestly. The technical picture is still not looking pretty and in the case of the Hang Seng index, the fall today comes right before it runs into a test of its 200-day moving average at 19,811.
