By Laura He, MarketWatch
HONG KONG (MarketWatch) — Chinese stocks gained Monday for the second session in a row, bolstered by the third rate cut from the Chinese central bank in six months.
Meanwhile, Japanese shares posted a solid advance to reach their highest closing level in nearly two weeks.
Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.10% rose 0.5%, up for a second straight session, with the mainland-China-tracking Hang Seng China Enterprises /zigman2/quotes/210598031/delayed CN:160462 -0.06% gaining 1%. On the mainland itself, the Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP -0.13% jumped 3%, adding to a 2.3% rise at the end of last week.
After China released weaker-than-expected inflation data Saturday, the People’s Bank of China on Sunday announced a quarter-percentage-point cut for both the benchmark deposit and lending rates, citing “still heavy downward pressures facing the economy.” The PBOC also lifted its ceiling on banks’ deposit rates as part of its campaign on interest-rate liberalization.
In Hong Kong, major Chinese banks recorded substantial gains across the board, with China Minsheng Banking Corp. /zigman2/quotes/208095167/delayed HK:1988 +2.03% /zigman2/quotes/203910009/delayed CN:600016 -0.20% /zigman2/quotes/200749234/delayed CMAKY -1.79% climbing 2.2%, Bank of China Ltd. /zigman2/quotes/204682472/delayed HK:3988 +0.96% /zigman2/quotes/201568493/delayed BACHY +0.80% /zigman2/quotes/209359942/delayed CN:601988 -0.30% up 1.4%, and Bank of Communications Co. /zigman2/quotes/203442771/delayed HK:3328 +1.19% /zigman2/quotes/208048873/delayed BKFCF 0.00% /zigman2/quotes/207155262/delayed CN:601328 +0.41% higher by 1.3%.
In Shanghai, top gainers among banking shares included China Citic Bank Corporation Ltd. /zigman2/quotes/206411273/delayed CN:601998 0.00% /zigman2/quotes/205809997/delayed HK:998 +1.42% , up 2.4%, and Bank of China Ltd., which added 1.6%.
Property stocks also mostly advanced. In Hong Kong, index component China Overseas Land & Investment Ltd. /zigman2/quotes/205731176/delayed HK:688 +0.40% /zigman2/quotes/210412581/delayed CAOVF -2.30% was up 4.1%, and China Resources Land Ltd. /zigman2/quotes/202417326/delayed HK:1109 -0.40% /zigman2/quotes/201656413/delayed CRBJF 0.00% — also a Hang Seng Index constituent — climbed 1.9%. In the property sector in Shanghai, Huayuan Property Co. Ltd. /zigman2/quotes/204155155/delayed CN:600743 -1.85% soared limit-up by 10%, and China Calxon Group Co., Ltd. /zigman2/quotes/205767260/delayed CN:000918 +2.97% popped 4.4% higher.
Meanwhile, tech stocks in Hong Kong extended a previous rally fueled by a Thursday statement by China’s State Council (China’s cabinet) that the nation will “strive to develop the e-commerce industry and cultivate a new impetus to power the economic growth.” A Monday report by the state-run China Fund newspaper that Chinese mutual funds have been doing close research on Internet-finance-related companies may also have helped lift the sector.
Index heavyweight and Chinese online major Tencent Holdings Ltd. /zigman2/quotes/204605823/delayed HK:700 -0.72% /zigman2/quotes/207908563/delayed TCEHY -0.39% rose 3% ahead of the release of its earnings results on Wednesday. Online-game developer NetDragon Websoft Inc. /zigman2/quotes/208746366/delayed HK:777 -0.93% soared 11%, and rival Baioo Family Interactive /zigman2/quotes/210039816/delayed HK:2100 -2.25% surged 9.7%. Software developer Kingdee International Software Group /zigman2/quotes/202787359/delayed HK:268 -0.78% /zigman2/quotes/210110520/delayed KGDEF -0.60% added 6.3%, and Kingsoft Corp. /zigman2/quotes/208824086/delayed HK:3888 +1.19% /zigman2/quotes/200487124/delayed KSFTF +3.09% was up 6.1%.
Other Asian markets were mostly higher. Japan’s Nikkei Average /zigman2/quotes/210597971/delayed JP:NIK -1.97% improved by 1.3% to 19,620.91, its best close since late April. The Topix /zigman2/quotes/210598092/delayed JP:180460 -1.55% moved up 0.7%.
The yen /zigman2/quotes/210561789/realtime/sampled USDJPY +0.0786% weakened slightly, with the dollar buying ¥119.98, compared with ¥119.84 late Friday in New York.