China Stocks Soar To Lead Upbeat Asia
Chinese stocks surged on Thursday to lead in an upbeat session for Asian markets, amid reports the country’s central bank injected a record amount of liquidity into the banking system.
China’s Shanghai Composite soared 2.9% in afternoon trading, and Hong Kong’s Hang Seng Index gained 1.2%.
The rally followed reports the People’s Bank of China injected a net 365 billion yuan (about $58 billion) this week into the Chinese banking system, ahead of the current quarter’s end and before the Golden Week holidays next week. Read more on the PoBC’s liquidity injection.
“We’re seeing mainland fund managers work their way into financials,” said Tom Kaan, Louis Capital Markets’ director of equity sales in Hong Kong.
Elsewhere in the region, Japan’s Nikkei Stock Average and Australia’s S&P/ASX 200 Index gained 0.5% each, while South Korea’s Kospi rose 0.4%.
Brokerage firms were among the major gainers in Shanghai, with Sinolink Securities Co. jumped by the day’s 10% limit, while Southwest Securities Co. climbed 7.5% and Haitong Securities Co. rose 6.4%.
Among banks, China Merchants Bank Co. rose 3.4%, while China Construction bank Corp. rose 2.6%.
Chinese banking shares also boosted the Hong Kong market, where China Merchants Bank climbed 1.9% and Industrial & Commercial Bank of China Ltd. added 2.3%.
Property stocks also advanced, with China Resources Land Ltd. up 2.6% and Guangdong Investment Ltd. rising 3.1%.
Esprit Holdings Ltd. was a notable decliner, adding to previous session losses with a 3.6% drop, one day after the fashion retailer delivered its fiscal-year profit result.
The day’s performance came despite a decline for U.S. stocks on Wednesday, as protests in Europe over austerity measures undermined investor confidence. Read more on the U.S. session.
Violent demonstrations were reported in Spain, as the government prepares to unveil its 2013 budget this week and has held off from requesting a bailout from its European partners. View a slideshow of Spain’s anti-austerity protests.
Protests also broke out in Greece over measures including wage cuts seen as necessary for the country to remain in the euro.
Louis Capital Markets’ Kaan said action by authorities to support the global economy was helping to offset Europe’s latest woes.
“The fact remains that global central banks have come together to shore up the bottom of the market. Everyone is waiting for the final element, and that is China,” he said. “There is further upside for risk assets as we head into the last quarter of the year.”
Exporters advanced in Seoul, as Samsung Electronics Co. rose 1% and Hyundai Motor Co. traded up 0.6%.
Automakers headed higher in Tokyo, with Honda Motor Co. up 1% and Suzuki Motor Co. rising 1.4%.
Sharp Corp. tumbled 3.9% amid reports the electronics firm may withdraw its solar panel business out of Europe and the U.S. as part of a cost cutting measure.
Defensive stocks outperformed in Sydney, as blood products maker CSL Ltd. rose 1.8% and hearing device maker Cochlear Ltd. added 1.4%.
Shares of Woolworths Ltd. traded down 0.9% after the retailer offloaded its Dick Smith Electronics arm for 20 million Australian dollars ($20.7 million) to Anchorage Capital Partners.
Marketwatch
