China Stocks Rally To Lead Asia Gains

Chinese stocks jumped to lead gains for Asia markets Wednesday, with the Shanghai bourse rallying off a four-year low as investors picked up financial and property stocks.

The Shanghai Composite Index  surged 3% after recent losses, while Hong Kong’s Hang Seng Index  advanced 1.5%.

Gains were more moderate in other markets, with Japan’s Nikkei Stock Average  finishing 0.4% higher, and South Korea’s Kospi adding 0.7%, while Singapore’s Straits Times Index  and Australia’s S&P/ASX 200 index  rose 0.4% apiece.

U.S. stocks dampened early sentiment in Asia with a lower finish Tuesday, as political leaders wrangled over fiscal-cliff budget talks to avert steep tax hikes and spending cuts that could push the U.S. economy into recession.

But Chinese share markets ignored the weak offshore lead to post sharp gains Wednesday.

Linus Yip, strategist at First Shanghai Securities said: ”I don’t see any sparkling news, but we all know the Shanghai index is already at four-year lows amid a lack of market confidence, so I think it’s a technical rebound.”

“Hong Kong is following the rebound in Shanghai,” Yip added. News out late Tuesday of the Hong Kong Monetary Authority’s latest market intervention to curb the strength of the Hong Kong dollar also likely helped confidence in Hong Kong, he said, as “it’s a signal that funds are coming into the market.”

Meanwhile, HSBC’s Chinese economics team said comments from a meeting of China’s new leaders Tuesday implied that supportive economic policy would remain in place in China over coming quarters.

The meeting, the first official assessment of the Chinese economy following November’s leadership handover, saw leaders call for policy continuity and stability, the economists noted.

“Both monetary and fiscal policies are likely to stay accommodative to help China strengthen domestic demand and tackle external challenges,” the economists said.

The leaders also indicated confidence about meeting 2012 economic and social development goals, they said.

Amid the broad-based gains for Chinese shares, insurance companies outperformed with Ping An Insurance Group Co. rising 5.1% in Hong Kong after HSBC Holdings PLC   closed its stake-sale in the insurer, removing an overhang of shares.

Ping An’s Shanghai shares , jumped 3.9%, with rival China Life Insurance Co.   up 2.9%.

“Banks and insurance stocks are doing well as they are big-cap stocks and tend to move with the market,” said First Shanghai Securities’ Yip.

Banks gaining ground in Hong Kong included HSBC, up 1.3%, while China Merchants Bank Co.   rose 2.4%, and Bank of East Asia Ltd.   climbed 2.9% after a Nikkei report that it’s planning a share sale to Japan’s Sumitomo Mitsui Banking Corp.

Mainland Chinese property developers also stood out in Hong Kong, with China Resources Land Ltd.  , up 3.5%, while Hong Kong’s Wharf Holdings Ltd.  gained 3.9%.

On the Chinese mainland, real-estate major China Vanke Co.  rose 3.2% in Shenzhen after its November sales doubled in November to 17.13 billion yuan ($2.75 billion) compared to a year ago.

Vanke rival Gemdale Corp.  advanced 5.1% in Shanghai.

Over in Tokyo, Fast Retailing Co.   advanced 3% after the market heavyweight reported late Tuesday that November same-store sales in Japan for its Uniqlo casual clothing chain rose 13.7%.

Consumer-electronics firm Sharp Corp.   jumped 4% after it announced an investment of up to $120 million from Qualcomm Inc.

However, losses for some tech and industrial firms worked to curb upside for the Japanese market, as Fujitsu Ltd.   gave up 1.9%, and Renesas Electronics Corp.   retreated 1.4%.

Technology firms saw some gains in Korea, however, with heavyweight Samsung Electronics Co.  up 1.5%, SK Hynix Inc.    ahead by 1.4%, and LG Display Co.  gaining 2.6%.

Banks moved higher in Australia after Tuesday’s interest rate cut, with Commonwealth Bank of Australia.    up 1% and Westpac Banking Corp.   rising 0.6%.

National Australia Bank Ltd.   improved by 0.3% after it said it would pass on 20 basis points of the Reserve Bank of Australia’s 25 basis point cut made Tuesday to its customers, the first of the major banks to do so.

Marketwatch