Asia Market Snapshot: Asian Stocks Fall as China Reaffirms Limiting Property Market Speculation

The Chinese Ministry of Housing and Urban Development reaffirmed its commitment to enforcing policies preventing speculative real-estate investment. Separately, the China Banking Regulatory Commission also said it made no changes to its policies on home loans. Stocks fell on the news reversing yesterday’s gains fueled by speculation China may be relaxing its tightening measures. (See RGE Critical Issue: Chinese Property Regulations: Backing Away from Austerity?).

The MSCI Asia Pacific index fell 0.3% to 115.76 while the MSCI Asia Apex 50 declined 0.61% to 731.

In Japan, stocks fell led by exporters as a stronger yen hurt the outlook for overseas revenues.The NIKKEI 225 declined 0.1% to 9,537. Fanuc Ltd, with 80% overseas exposure, declined 2.1% while Honda fell 1.8%. Steelmakers also declined after China announced it will push for consolidation in the steel industry and curb any rapid increase in output. Nippon Steel dropped 2.3%.

In Hong Kong, stocks declined as developers slid after Beijing reiterated its commitment to curbing speculative investment in real estate.The Hang Seng index lost 0.2%.

In mainland China, stocks also fell as the government quashed speculation that it will ease its tightening stance on mortgage lending.The Shanghai Composite slumped 1.6%with lenders and developers leading the declines. (See RGE Critical Issue: Chinese Property Regulations: Backing Away from Austerity?).  A shares fell 1.63% and B shares lost 1.13%. ICBC lost 1.2% whilePoly Real Estate slumped 4.3%.Agricultural Bank of China raised US$19.2 billion in the world’s biggest IPO in 4 years.

In India, stocks advanced for a second day on expectations that earnings will remain strong despite Infosys disappointing earnings.The BSE Sensex 30 rose 0.3%. Reliance gained 1.7%.Infosys, India’s second largest software exporter dropped 3.4% after reporting lower than expected profit.

In Australia, BHP and Rio Tinto led the declines on speculation that their iron-ore venture may be subject to antitrust review in Japan.  The S&P/ASX 200 declined 0.7%while in New Zealand, the NX 50 fell 0.1% to 3,009.

In Seoul, stocks ended higher after earlier declines. The KRX 100 rose 0.2% to 3,636 due to better U.S. earnings, but Hyundai fell 2.1% and Kia was down 3.3%.

The yen gained 0.17% against the dollar as investors sought relative safety. The Aussie, dollar advanced another 0.27% against the US dollar while the Hong Kong dollar gained 0.01%. The rupee gained 0.1% to 46.78.

Japanese Government Bonds (JGBs) fell on speculation that U.S. reports will show improvement in the world’s largest economy.  The yield on the 10-year JGB rose 0.5 bps to 1.135%. The Indian 10-year bond fell with the yield advancing 1.3 bps to 7.623%.

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