Asian shares retreat on disappointing China housing policy

Asian shares initially rose but later declined due to disappointing housing policy news in China, while the dollar remained strong amid expectations of a Trump victory in the presidential race.

Global bonds were steady after a significant decrease in British inflation and anticipation of the European Central Bank’s rate cut.

Investors are closely watching TSMC’s results following a weak forecast from ASML that impacted chip stocks.

Japan’s Nikkei index slid 0.6 per cent, mirroring the broader Asian market retreat. The Shanghai Composite index remained flat, while Hong Kong’s Hang Seng index ended the day 0.6 per cent higher after paring back earlier gains of two per cent.

The disappointment stemmed from China’s housing policy. The CSI300 real estate index plummeted five per cent, erasing two days of gains.

While the housing minister promised improved access to funding and the central bank highlighted positive impacts of earlier down payment cuts, investors were looking for more aggressive measures to address the sector’s woes.

Australian shares also pulled back from a record high, with mining stocks and iron ore prices slipping. US equity futures mirrored the cautious sentiment.

The Australian dollar rose from a one-month low in Asia following strong net employment data, reducing expectations of rate cuts.

During Asian trading hours, the 10-year US yields remained unchanged at 4.03 per cent, while the two-year yields stayed at 3.95 per cent. The British pound was trading at $1.2993, close to its lowest point from the previous day.

Brent crude futures stabilised at $74.57 per barrel following four consecutive sessions of decline, after US crude stockpiles unexpectedly dropped last week. Gold hovered at $2,677 an ounce, just short of record levels.

Attribution: Reuters

Subediting: M. S. Salama