** The correction could also be triggered by signs of an escalating Sino-U.S. technology war, and risk-off sentiment ahead of this week's U.S. interest rate decision, Morgan Stanley said, adding, it "would take the current opportunity to recommend buy-the-dip."
** China's bluechip CSI300 Index closed down 1.1%,
while the Shanghai Composite Index fell 0.4%. Hong Kong's Hang
Seng benchmark lost 1%.
** For the month, though, the CSI300 jumped 7.4%, while the
Hang Seng surged 10.4%.
** The recent market rebound was fuelled by strong foreign
money inflows, as global funds bet on China recovery after
Beijing dropped strict COVID curbs last month.
** Despite the week-long Spring Festival break, China's onshore stock market witnessed 141.3 billion yuan ($20.92 billion) in net foreign buying via Stock Connect in January, the biggest monthly inflows on record. It also surpassed total inflows in 2022.
** Official data showed that China's economic activity swung back to growth in January, confirming that the economy had bottomed in December.
** "We expect economic momentum to improve further in Q1 and
Q2 as the service sector recovers and consumption normalizes,"
wrote Zhiwei Zhang, president of Pinpoint Asset Management.
** But most China stocks fell as caution reigned.
** China tech stocks dropped 1.7% on media reports that the Biden administration has stopped approving licenses for U.S. companies to export most items to China's Huawei, signalling an escalation in the Sino-U.S. tech war.
** Hong Kong tech shares also fell, following an
overnight slump in U.S.-listed China stocks .
** Morgan Stanley said it stays "Overweight" on Chinese
equities, citing on-track economic recovery, signs of Sino-U.S.
ties stabilization, low correlation with the U.S. market, and
attractive valuation.
($1 = 6.7533 Chinese yuan)
(Reporting by Shanghai Newsroom; editing by Uttaresh.V and
Rashmi Aich)
