By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) -- Mainland Chinese and Hong Kong stocks
jumped to lead most Asian markets higher Monday amid hopes Beijing
would step in to support the economy.
The Shanghai Composite added 1.6%, and Hong Kong's Hang Seng
Index advanced 1.3%.
Both benchmarks extended gains after Hong Kong daily newspaper
South China Morning Post reported that Beijing was "quietly
offering financial stimulus" to key cities and provinces to support
the local economies.
The report, citing unnamed government sources, said that while
policy makers had repeatedly denied the possibility of national
stimulus, they didn't rule out "unofficial economic stimulus" to
help key local economies.
Kim Eng Securities director of sales trading Andrew Sullivan
said hopes for a stimulus led to a spike in stocks, triggering
stop-loss orders on investors' short sales.
The bounce also followed data released late Friday, showing
Chinese banks made 699.9 billion yuan ($114.3 billion) (USDCNY)
worth of local-currency loans in July, beating expectations.
Construction-related stocks soared in the morning trading
session on Chinese markets.
Shares of Anhui Conch Cement Co. jumped 4.4%, and property
developer Gemdale Corp. rose 3.7% in Shanghai.
In Hong Kong, Anhui Conch advanced 3.6%, Aluminum Corp. of China
Ltd. (ACH) rose 4%, and China Resources Land Ltd. (CRBJF) gained
2%.
The strong advance also helped prop up other regional markets,
with Australia's S&P/ASX 200 rising 0.8%, and South Korea's
Kospi adding 0.3%.
However, Japan's Nikkei Stock Average was down 0.3% in afternoon
trading, though off its lows of the day. The weakness came amid a
strengthened yen and after data showing slower-than-expected
economic growth in the April-June quarter.
The Japanese government said Monday the economy grew at an
annualized rate of 2.6% in the previous quarter. The expansion
marked a third straight quarter of growth but was a full percentage
point short of the 3.6% improvement estimated in a Dow Jones
Newswires survey.
"The economic conditions have turned out less favorable or more
tricky for the scheduled consumption-tax hikes," said Crédit
Agricole economist Kazuhiko Ogata.
Ogata cited uncertainty about the plan's implementation
following Japan's Prime Minister Shinzo Abe earlier instructions to
ministers to evaluate the impact from the planned consumption tax
hikes before making a final decision on the increase.
Japan's parliament has already approved an increase in the
consumption tax to 8% by April 2014 and to 10% by October 2015,
from 5% at present. The tax increase, aimed at boosting the revenue
of the highly indebted Japanese government, is expected to weigh on
the nation's economic recovery.
Financial shares declined in Tokyo, with Daiwa Securities Group
Inc. (DSEEY) losing 3.7%, Nomura Holdings Inc. (NMR) sliding 3.3%,
and Mizuho Financial Group Inc. (MFG) shedding 1.4%.
Bridgestone Corp. (BRDCY) gained 4.8% after the tire maker
raised its profit forecast for the fiscal year ending next March,
while Citizen Holdings Co. surged 15.6%, boosted by strong results
and an increase in its own profit outlook.
But many other exporters retreated after the U.S. dollar
(USDJPY) briefly slid under the Yen96-level, with Fast Retailing
Co. (FRCOY) falling 0.6%, and Nikon Corp. (NINOY) declining
2.7%.
Over in Sydney, Australian miners posted solid gains following
an increase in metals prices Friday. BHP Billiton Ltd. (BHP) and
Rio Tinto Ltd. (RIO) added 2.6% each.
"With uncertainty over [U.S.] Federal Reserve stimulus measures
lurking in the background, markets are struggling to find
direction," said Rivkin Securities global analyst Tim Radford.
"Given it's a relatively quiet economic week ahead, we could expect
to see equities track sideways."
Newcrest Mining Ltd. (NCMGF) jumped 5.4% despite posting a
record annual loss and scrapping its dividend payment, as its
profit after stripping off one-time impairment charges came ahead
of expectations.
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