** The correction could also be triggered by signs of an escalating Sino-U.S. tech war, and risk-off sentiment ahead of this week's U.S. rate decision, Morgan Stanley said, adding the bank "would take the current opportunity to recommend buy-the-dip."
** China's bluechip CSI300 Index lost 0.8% by the
lunch break, while the Shanghai Composite Index fell 0.4%. Hong
Kong's benchmark Hang Seng dropped 1.3%.
** For the month, though, CSI300 is set to jump nearly 8%,
while Hang Seng is on track to gain 10%.
** 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 roughly 140 billion yuan ($20.72 billion) in net foreign buying via Stock Connect in January, registering the biggest monthly inflows on record. It also surpassed total inflows in 2022.
** Meanwhile, official data on Tuesday 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 on Tuesday as caution reigned.
** China tech stocks dropped after news that the
Biden administration has stopped approvinglicenses for U.S.
companies to export most items to China's Huawei, signalling an
escalating of the 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
attract valuation.
($1 = 6.7570 Chinese yuan)
(Reporting by Shanghai Newsroom; editing by Uttaresh.V)
