Shanghai stocks close at 4-week high as property sector gains on policy hopes
SHANGHAI — China and Hong Kong stocks ended mostly positive territory on Wednesday, with some key indexes finishing at multi-week highs, led by gains in developers on rising hopes that the Chinese government would roll out supportive measures to prop up the country’s ailing property sector.
** At the close, the benchmark Shanghai Composite index climbed 0.5% to record the highest closing price since July 20, while the blue-chip CSI 300 index was up 0.9%, the loftiest close since July 28.
** In Hong Kong, the benchmark Hang Seng Index advanced 0.5%, while Chinese H-shares listed in Hong Kong gained 0.4%.
** The property sector was among the top gainers after sources told Reuters that China would guarantee new onshore bond issues by a few select private developers to support its embattled property sector, while the state planner said it would boost economic demand and speed up infrastructure projects.
** The CSI real estate index jumped 3.52%. However, Chinese developers listed in Hong Kong gave back all intraday gains to ease 0.24% by the end of the session, as some analysts and economists said the policy support was far from enough.
** “The policy response to the deteriorating property sector may be too slow and uncoordinated in the lead-up to the once-in-a-decade political reshuffle,” said Lu Ting, chief China economist at Nomura.
** “The credit support Chinese regulators plan to provide to select developers could be of some help, though it’s far from a comprehensive solution to the big woes in the property sector.”
** Separately, Premier Li Keqiang pledged that China would step up macroeconomic policy support for the economy, after a slew of key economic gauges, including credit lending data and activity indicators, showed growth unexpectedly slowed last month.
** Li made the comment during a video meeting with senior officials from six major provinces – Guangdong, Jiangsu, Zhejiang, Shandong, Henan and Sichuan.
** “In our view, the meeting highlighted the urgency to fuel the recovery momentum but the focus remained on the implementation of existing pro-growth measures, instead of introducing new growth initiatives,” said Ken Cheung, chief Asian FX strategist at Mizuho Bank.
(Reporting by Shanghai Newsroom; Editing by Subhranshu Sahu and Raju Gopalakrishnan)