The Chinese property and constructions sectors rose on Wednesday on the back of a government announcement, while concerns over nuclear power plants in Japan drove utilities shares down.
Aug. 01, 2013 - CHUO-KU, Japan -- The Chinese market posted small gains after an announcement from the Communists Party´s politburo pledged to maintain the pace of economic growth for the third and fourth quarters despite what they referred to as, “extremely complicated domestic and international conditions.” The committee chaired by President Xi Jinping also said that, “macro policy should be stable, micro policy should be flexible, and social policy should support the bottom line.” Analysts at Harver Group noted that there was no mention of controlling home prices instead stating that it wants to promote stable growth in the sector. Our analysts interpret this to mean that the new government will not take steps to limit demand and tighten financing.
There were a number of notable movers in the Chinese property and construction sector. In the Chinese market, Poly Estate Group Co. climbed 3.2%, Glendale Corp. gained 3.7% and Anhui Conch Cement Co. took 1.5%. In Hong Kong, China Resources Land Ltd. Gained 3.4% and Guangzhou R&F Properties Co. spiked 6.7%.
Japan´s Nikkei Stock Average dropped 1.5%, erasing the gains from yesterday´s session. Concerns are rising in Japan over a possible sales tax increase and public fears of reopening nuclear-power plants. A number of power utilities slid; Chubu Electric Power Co. dropped 4.4% Tokyo Electric Power Company lost 5.7%,a and Kansai Electric Power Co. fell 5.1%.
Other regional markets were down as well; South Korea´s Kospi lost 0.2% and The Hang Sing in Hong Kong fell 0.3%. But Australia´s S&P/ASX 200 beat the trend and finished another session with a marginal gain of 0.1%. Yesterday the Governed of the Reserve Bank of Australia issued a statement saying that despite current levels of inflation, the bank is still considering further quantitative easing.