Asia report: Chinese property shares jump on fresh policy

Stocks in the Asia-Pacific region ended mixed on Friday, driven by significant developments in China's property market.

The People’s Bank of China (PBOC) announced comprehensive measures to rejuvenate the struggling sector, including lowering minimum mortgage down payments and removing the floor on mortgage interest rates.

“Overnight the Asian equity market showed a mixed performance,” said TickMill market analyst Patrick Munnelly.

“China's April data revealed conflicting economic trends, with industrial production growth surpassing expectations while retail sales growth unexpectedly slowed.

“This divergence is unlikely to alleviate pressure on Chinese authorities to implement additional measures to stimulate the domestic economy.”

Munnelly noted that Chinese property developer stocks rose as investors anticipated more government measures to stabilise the crisis-hit sector, adding that new data revealed the fastest decline in new home prices in over nine years.

“Vice premier He Lifeng announced that China will allow local government authorities to purchase homes at ‘reasonable’ prices to provide affordable housing during an online meeting on housing policy.

“In the US, Federal Reserve policymakers cautioned that despite this week's lower-than-expected inflation report, interest rates might need to remain high for a prolonged period.

“On the other hand, Bank of England policymaker Greene indicated evidence of a more balanced UK labour market, hinting at potential support for an interest rate cut.”

Markets mixed, property stocks rise in Hong Kong

In Japan, the Nikkei 225 declined by 0.34% to 38,787.38, while the Topix edged up by 0.3% to 2,745.62.

Leading decliners on Tokyo’s benchmark included Sumitomo Dainippon Pharma, down 5.35%, Dentsu falling 4.32%, and CyberAgent dropping 4.27%.

Chinese markets saw gains with the Shanghai Composite rising 1.01% to 3,154.03 and the Shenzhen Component increasing by 1.1% to 9,709.42.

Notable performers in Shanghai were Guangzhou Fangbang Electronics, surging 17.93%, and Greenland Holdings, up 10.15%.

Hong Kong's Hang Seng Index climbed 0.91% to 19,553.61, bolstered by a rally in property developer stocks following the PBOC’s policy announcements.

Longfor Properties jumped 10.87%, Country Garden Services rose 9.82%, and Alibaba Group advanced 7.53%.

South Korea’s Kospi fell 1.03% to 2,724.62, with SKC and Hyundai Heavy Industries plunging 8.49% and 7.33%, respectively.

In Australia, the S&P/ASX 200 declined by 0.85% to 7,814.40, with Dicker Data dropping 13.15% and Xero falling 5.12%.

New Zealand's S&P/NZX 50 slipped 0.24% to 11,699.79, pressured by Property for Industry, down 5.41%, and Ryman Healthcare, which fell 4.39%.

In currency markets, the dollar was last up 0.32% on the yen to trade at JPY 155.89, while it added 0.4% against the Aussie to AUD 1.5033, and advanced 0.28% on the Kiwi to change hands at NZD 1.6381.

Oil prices edged higher, with Brent crude futures last up 0.22% on ICE at $83.45 per barrel and the NYMEX quote for West Texas Intermediate ahead 0.2% at $79.39.

Chinese economic data paints mixed picture, exports fall in Singapore

In economic news, fresh data out of China for April presented a mixed picture.

Retail sales increased by 2.3% year-on-year, falling short of the anticipated 3.8% rise and slowing from March's 3.1% growth, according to the National Bureau of Statistics (NBS).

In contrast, industrial production exceeded expectations, growing by 6.7% compared to the forecasted 5.5%, and significantly higher than the 4.5% growth in March.

Fixed asset investment, however, grew 4.2% in the first four months of the year, missing the 4.6% estimate.

China’s urban unemployment rate meanwhile decreased to 5% in April from 5.2% in March.

The NBS highlighted that the Labour Day holiday and last year's high base influenced the figures.

“Major indicators of industry, exports, employment, and prices improved overall, with new driving forces maintaining rapid growth,” it stated.

In Singapore, non-oil domestic exports (NODX) fell 9.3% year-on-year in April, improving from a 20.8% drop in March.

Enterprise Singapore attributed the decline to non-electronic goods, particularly pharmaceuticals, although electronic goods resumed growth.

The decrease was less severe than the predicted 10% fall. Exports to key markets like the US and EU continued to decline, with drops of 40.6% and 55.1%, respectively.

Malaysia's economy meanwhile showed robust growth in the first quarter of 2024, expanding by 4.2% year-on-year, surpassing the 3.9% growth forecast.

It marked the strongest performance since the first quarter of 2023, which saw a 5.5% increase.

The economy had grown by 2.9% in the prior quarter.

Malaysia’s services and manufacturing sectors boosted supply, while private final consumption expenditure and gross fixed capital formation drove demand.

Reporting by Josh White for Sharecast.com.