Mainland China stocks end week with solid losses as property shares drag
Benchmark Shanghai Composite Index down 2.2 per cent for the week
Mainland China stocks closed slightly higher on Friday, but still booked a solid loss for the week, as most property shares declined after the authorities signalled their intention to curb the house-buying frenzy in some large cities.
The Shanghai Composite Index opened lower and extended losses in the early afternoon before receiving a late boost from banking shares and closing up 0.2 per cent or 5.58 points at 2,810.31. The index lost 2.2 per cent for the week, after gaining 3.9 per cent the previous week. In recent days, the benchmark index has often seen substantial buying in the last minutes of trading, prompting speculation that state-backed funds have been intervening to shore up share prices during the ongoing meeting of the National People’s Congress in Beijing.
Turnover for Shanghai and Shenzhen markets continued to shrink, down to 304 billion yuan from 355 billion yuan on Thursday.
The ECB bazooka may have some bearing on the US Federal Reserve and Bank of Japan when they decide on monetary policy next week
The large-cap CSI 300 Index also edged up 0.2 per cent or 5.13 points on Friday to 3,018.28. However, the Shenzhen Composite Index slipped 0.2 per cent or 3.73 points to 1,685.24. The Nasdaq-style ChiNext Index inched down 0.1 per cent or 2.1 points to 1,934.87.
Property shares continued to be a weak spot on the markets, after some top government officials warned at the NPC meetings against the current real estate frenzy in tier-one cities. The banking regulators also signalled they are mulling measures to tighten property-related lending amid concerns about credit risks.
Gemdale declined 1.8 per cent to 11.96 yuan, Beijing North Star fell 1.2 per cent to 4.03 yuan, and Poly Real Estate dropped 1.1 per cent to 9.36 yuan.
As property prices in bigger and smaller cities diverge, developers with a high percentage of net asset value in tier-one cities could suffer some damage from new tightening measures, Deutsche Bank analysts said in a recent research note.
Bank of China advanced 1.4 per cent to 3.40 yuan, Agricultural Bank of China rose 1 per cent to 3.18 yuan, and Industrial and Commercial Bank of China ticked up 0.2 per cent to 4.33 yuan.