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 surging 2.9%. Shenzhen's Composite Index
leapt 3.8% and Hong Kong's Hang Seng Index advanced 2.2% to end at
a 16-month high.
Gains were more moderate in other markets, with Japan's Nikkei
Stock Average finishing 0.4% higher, and South Korea's Kospi adding
0.7%.
Australia's S&P/ASX 200 index rose 0.4%, and Singapore's
Straits Times Index was up 0.6% late.
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."
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."
Movers
Amid the broad-based gains for Chinese shares, insurance
companies outperformed, with Ping An Insurance Group Co. (PNGAY)
rising 5.1% in Hong Kong after HSBC Holdings PLC (HBC) agreed to
sell its stake in the insurer.
Ping An's Shanghai shares , jumped 4.2%, with rival China Life
Insurance Co.'s (LFC) Shanghai-listed shares added 2.9%.
"Banks and insurance stocks are doing well as they are big-cap
stocks and tend to move with the market," said First Shanghai
Securities' Yip.
Banks gaining ground in Hong Kong included HSBC, up 1.7%, while
China Merchants Bank Co. (600036.SH) rose 2.6%, and Bank of East
Asia Ltd. (BKEAF) climbed 2.2% after a Nikkei report that it's
planning a share sale to Japan's Sumitomo Mitsui Banking Corp.
Mainland Chinese property developers also stood out in Hong
Kong, with China Resources Land Ltd. (CRBJF), up 2.5%, while Hong
Kong's Wharf Holdings Ltd. (WARFF) gained 4.3%.
On the Chinese mainland, real-estate major China Vanke Co. rose
2.1% in Shenzhen after its November sales doubled in November to
17.13 billion yuan ($2.75 billion) compared to a year ago.
Vanke rival Gemdale Corp. advanced 4.1% in Shanghai.
In other China action, shares of heavy equipment makers Zoomlion
Heavy Industry and Sany Heavy Industry jumped 6% and 10%
respectively as the meeting by China's new leaders was seen as
giving a boost to urban construction projects.
Tokyo
Over in Tokyo, Fast Retailing Co. (FRCOY) advanced 3% after the
market heavyweight reported late Tuesday that November same-store
sales in Japan for its Uniqlo casual clothing chain rose 13.7%.
Consumer-electronics firm Sharp Corp. (SHCAF) jumped 4% after it
announced an investment of up to $120 million from Qualcomm
Inc.
However, losses for some tech and industrial firms worked to
curb upside for the Japanese market. Fujitsu Ltd. (FJTSY) gave up
1.9%, and Renesas Electronics Corp. (RNECY) retreated 1.4%.
(QCOM)Technology firms saw some gains in Korea, however, with
heavyweight Samsung Electronics Co. (SSNLF) up 1.8%, SK Hynix Inc.
(HXSCL) ahead by 1.6%, and LG Display Co. gaining 2.3%.
Banks moved higher in Australia after Tuesday's interest rate
cut, with Commonwealth Bank of Australia (CBAUY) up 1% and Westpac
Banking Corp. (WBK) rising 0.6%.
National Australia Bank Ltd. (NAUBF) improved by 0.3% after it
said it would pass on 20 basis points of the Reserve Bank of
Australia's 25 basis point cut made Tuesday to its customers, the
first of the major banks to do so.
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