By Sarah Turner, MarketWatch
HONG KONG (MarketWatch) — Chinese stocks jumped on Wednesday, leading gains for Asia markets, as China’s incoming leaders made reference to policy continuity and stability in their first official gathering since last month’s leadership convention.
The Shanghai bourse rallied off a 46-month low, with the Shanghai Composite Index /zigman2/quotes/206600939/delayed CN:000001 -1.59% surging 2.9%. Shenzhen’s Composite Index leapt 3.8% and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +2.70% advanced 2.2% to end at a 16-month high.
Gains were more moderate in other markets, with Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +1.39% finishing 0.4% higher, and South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +2.61% adding 0.7%.
Supportive economic policy seen
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.
“They see the economy stabilizing and more favorable factors in the coming year. They called for policy continuity and stability, and strengthening of reform efforts in key policy areas.
“This in our view implies that accommodative policy as well as property tightening measures will remain in place in the coming quarters. In addition, fiscal and urbanization reforms are set to be stepped up,” the economists said.
The leaders also indicated confidence about meeting 2012 economic and social development goals.
The news helped drive China stocks higher, although other analysts said there was little in the statements that could be seen as adding a major boost to markets.
Meanwhile, Kevin Lai, an economist at Daiwai in Hong Kong, said: “Sentiment has improved as many have been talking about a Chinese recovery. [But] the broad picture hasn’t really changed; growth continues to be quite soft elsewhere ... we recently downgraded our forecasts in Europe, Japan and the U.S.”
China crackdown reaches Macau
Police in mainland China and Macau have recently detained people from at least three of Macau's biggest junket operators.
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.”
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.”
Amid the broad-based gains for Chinese shares, insurance companies outperformed, with Ping An Insurance Group Co. /zigman2/quotes/210315058/delayed HK:2318 +0.10% /zigman2/quotes/202212125/composite PNGAY +3.10% rising 5.1% in Hong Kong after HSBC Holdings PLC /zigman2/quotes/202687335/delayed HK:5 +4.16% agreed to sell its stake in the insurer.