By Chao Deng
Shares in China finished at their highest levels in nearly a month on Monday, amid expectations Beijing would introduce measures to help boost the country’s flagging property sector.
The Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP +1.84% rose 1.8% to 3642.47, its highest closing level since Nov. 25.
A gauge of property shares on the CSI 300, which measures performance of the largest 300 listings in Shanghai and Shenzhen, rose 2.7% Monday. Across-the-board gains in blue chips led the broader benchmark up 2.6%.
Elsewhere, Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +0.43% fell 0.4%, while Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.17% rose 0.2%, and South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -0.68% rose 0.3%. Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.09% was flat.
A commodities rout and worries about the first increase to U.S. interest rates in nearly a decade has pressured the Asia region in recent weeks. Yet hopes for fresh government stimulus to prop up real estate in lower-tier cities has changed the momentum in the Chinese market.
The Shanghai Composite Index, which gained 1.9% in the month of November, is now on track to rise 5.7% this month, making it one of Asia’s best performing benchmarks.
“We think there will be a lot of priority [by Beijing] toward the property sector,” said David Millhouse, head of China research at Forsyth Barr Asia Ltd., adding that expectations are building after an economic planning meeting over the weekend, the country’s annual Central Economic Work Conference.
Chinese insurers have been big buyers of cheaply valued blue-chip stocks since the stock market bottomed out, said Millhouse, which picked up on Monday.
Cheap valuations are underpinning insurers’ recent moves to buy significant stakes in companies. Earlier this month, Anbang Insurance Group raised its stake in Sino-Ocean Land Holdings, and bought a 5% stake in China Vanke Co. /zigman2/quotes/205643772/delayed CN:000002 +0.67% , the country’s largest property developer.
Meanwhile, China Vanke is aiming to block an unusual, unsolicited takeover effort through a restructuring plan, which could involve asset purchases and a stock issue. The company on Sunday said it would release details about its plan before Jan. 18. Shares of the firm remain halted for trading in Hong Kong and Shenzhen after their suspension Friday.
The continuing fight for Vanke lifted other property shares. In Shenzhen on Monday, Financial Street Holding Co. /zigman2/quotes/204199774/delayed CN:000402 +1.26% shares rose 9.7%, compared with a 1% gain for the broader index. In Shanghai, Gemdale Corp. /zigman2/quotes/208026094/delayed CN:600383 +0.79% gained 10% and Poly Real Estate Group Co. /zigman2/quotes/201864015/delayed CN:600048 +1.03% gained 5.6%. Authorities set a 10% daily movement limit for mainland listings.
Elsewhere, Japanese stocks fell on Monday after the limited scope of the central bank’s latest changes to its easing program, announced Friday, fell short of market expectations. The yen /zigman2/quotes/210561789/realtime/sampled USDJPY -0.0107% strengthened to ¥121.43 yen from ¥121.90 at the Tokyo market close last week.
The BOJ said on Friday it would maintain the size of asset purchases at current levels, but that it would lengthen the average maturity of the Japanese government bonds it buys and start buying new types of exchange-traded funds focused on corporate-governance.
The Nikkei is on track to fall 4.2% this month, the second-worst performing stock benchmark in the region after Thailand’s SET, which is down 6.5%.
In Tokyo, shares in Toshiba Corp. /zigman2/quotes/205628942/delayed JP:6502 -0.46% fell 9.8% after the company said it expected a ¥550 billion ($4.5 billion) loss in the current fiscal year, and disclosed plans to cut its workforce by 6,800 people in the wake of an accounting scandal.
In Hong Kong, shares of Fosun International Ltd. /zigman2/quotes/200058619/delayed HK:656 -0.74% rose 2.8%, recovering from a plunge of more than 10% in recent days, amid worries that an investigation the firm’s chairman was assisting could implicate the company itself.
The flagship of Chinese conglomerate Fosun Group, said Sunday it had withdrawn its bid for London merchant bank BHF Kleinwort Benson. The firm said previously that the investigation its chairman had been assisting was personal and not related to Fosun.
In currencies, China’s central bank guided the onshore yuan stronger against the U.S. dollar, breaking 10-straight sessions of setting the reference rate weaker. The onshore yuan can trade 2% above or below the daily fix.
The bank set the fix at 6.4753 against the U.S. dollar earlier. The onshore yuan /zigman2/quotes/210561991/realtime/sampled USDCNY +0.0028% stayed near its weakest level since 2011, last at 6.4793 to the U.S. dollar compared with 6.48 late Friday.