Citi sees China stock positioning improve while KOSPI weakens

Positioning trends diverged across Asian equity markets, with China showing improvement while South Korea weakened, according to Citi.

China A50 and Hang Seng positioning improved meaningfully as short covering helped lift positioning toward bullish territory, the firm said. The shift marks a notable change in sentiment toward Chinese equities.

Bearish flows intensified in both the Nikkei and KOSPI, driven primarily by new shorts. KOSPI continues to appear fragile despite notional exposure declining, Citi noted.

Existing long positions in KOSPI remain deeply in loss despite positioning becoming more neutral at the headline level. The firm said capitulation risk could rise further if market weakness continues.

Citi tracks positioning trends across major Asian equity indices to assess investor sentiment and potential market moves.