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Property Surge Limits Hang Seng Losses, Weak Yen Lifts Nikkei

Real estate giants China Evergrande and Sunac China saw their stocks soar with investors reacting positively to more promises of state support

Markets fell broadly across Asia on Friday as investors waited for a speech by Fed chair Jay Powell on upcoming policy moves.
This image shows a man walking past a brokerage house in Jiujiang, Jiangxi province, China. Photo: Reuters.


Asian stocks finished the day marginally ahead, with bets on a turnaround for China’s ailing property sector helping to lift the mood on Wednesday.

Shares of crisis-hit Chinese property developer Evergrande soared by as much as 82%, paring losses on Hong Kong’s benchmark, while other real estate giants like Sunac China and Country Garden Holdings also saw their stocks surge by 61% and 18%.

Evergrande’s stock ended the day 66% higher but the overall index was weighed down by healthcare and industrial stocks.


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The gains came after Country Garden reportedly managed to pay $22.5 million in bond coupon payments on Tuesday, narrowly avoiding default, and as Beijing ramped up its pledges of support for the property sector and wider economy.

The Shanghai Composite Index rose 0.21%, or 6.47 points, to 3,160.84, while the Shenzhen Composite Index on China’s second exchange edged up 0.08%, or 1.51 points, to 1,971.59.

China is set to release its August trade data on Thursday. Both exports and imports are expected to further contract on a year-on-year basis, but at a slower pace.

This will follow a notable decline in the August Caixin/S&P Global services purchasing managers’ index published on Tuesday, indicating that bigger stimulus is needed to revive the economy.

Hong Kong-listed mainland property developers jumped 3% as investors bet on more easing measures for the sector, but the benchmark Hang Seng Index lost 0.04%, or 6.93 points, to close at 18,449.98.

Japanese equities closed at new highs, with the weakest yen rate since November boosting automakers, while energy shares outperformed amid a surge in crude oil prices.

The Nikkei 225 share average finished the day up 0.62% to 33,241.02, its highest close in a month. The broader Topix added 0.62% to 2,392.53, a fresh 33-year peak.

Both indexes extended winning streaks to an eighth straight session, the longest run since mid-May for the Nikkei and since mid-April for the Topix.

Transport equipment was among the best-performing of the Tokyo Stock Exchange’s 33 industry groups, jumping 2% as the yen’s slide towards 148 per dollar boosted the value of overseas revenues.


US Interest Rate Signals

Elsewhere across the region, in earlier trade, Seoul, Sydney, Mumbai, Wellington and Taipei extended Tuesday’s losses, but Singapore and Jakarta edged up. MSCI’s gauge of Asia Pacific stocks outside Japan dipped 0.45%.

London and US markets were poised to open lower with FTSE futures and E-mini futures for the S&P 500 index down 0.42% and 0.13% respectively at 0520 GMT.

The yield on the benchmark US 10-year Treasury note rose 9 basis points to 4.26% after reaching 4.268%, its highest since August 25, while the US dollar rose to a near six-month high against a basket of currencies.

Investors are digesting recent signals on potential US interest rate hikes. Fed Governor Christopher Waller said on Tuesday that the latest round of economic data was giving the US central bank space to see if it needs to raise rates again.

The Institute for Supply Management (ISM) is set to release US services PMI on Wednesday.

US crude was up 0.06% at $86.74 a barrel. Brent gained 0.07% to trade at $90.10 a barrel.

Oil prices surged more than 1% in the previous session, as markets worried about a supply shortage after Saudi Arabia and Russia extended their voluntary supply cuts to the end of the year.

Spot gold rebounded up 0.09% at $1,927.79 per ounce by 0534 GMT, after posting its biggest one-day loss since August 1 on Tuesday.


Key figures

Tokyo – Nikkei 225 > UP 0.62% at 33,241.02 (close)

Hong Kong – Hang Seng Index > UP 0.06% at 18,467.86 (close)

Shanghai – Composite > UP 0.21% at 3,160.84 (close)

London – FTSE 100 < DOWN 0.88% at 7,372.12 (0932 BST)

New York – Dow < DOWN 0.56% at 34,641.97 (Tuesday close)


  • Reuters with additional editing by Sean O’Meara


Read more:

Chinese Developer Country Garden Settles Late Bond Payments

China Exports, Imports Seen Shrinking Slower in August: Poll

Hang Seng Slips on China Data, Nikkei on Seven-Day Streak



Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


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