Hong Kong stocks lifted by Shanghai property moves, China’s chip fund launch

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Hong Kong stocks rose for a second day as easing of restrictions in home purchases in Shanghai spurred optimism about a recovery in China’s property market while chip makers extended gains following the creation of the country’s largest-ever chip investment fund.

The Hang Seng Index advanced 0.6 per cent to 18,934.74 at the noon break, adding to the 1.2 per cent gain for the previous day. The Hang Seng Tech Index advanced 0.8 per cent, while the Shanghai Composite Index was little changed.

China’s property market is in focus as Shanghai, the country’s biggest commercial city, will offer subsidies for homebuyers and allow multi-child families to buy one more houses starting Tuesday as a follow-through of a nationwide rescue plan for the property market earlier this month. Other easing measures unveiled by the Shanghai government on Monday include cuts in down payment ratios and mortgage rates, and lowering of the threshold for non-locals to buy homes.
A city view of Shanghai, east China. It became the first tier-one city to roll out easing measures after China unveiled a sweeping rescue plan for the property market earlier this month. Photo: Xinhua

“There’s a ramp-up of the policy support for the property market from local-government levels,” said Shen Fanchao, an analyst at Zheshang International in Hong Kong. “We’ve seen some-pick-up in the property market. Additionally, more measures to boost domestic demand could be on the table.”

China Resources Land gained 1.5 per cent to HK$31 and property-management firm China Resources Mixc Lifestyle Services added 0.3 per cent to HK$30.05. SMIC rose for a second day, rising 0.2 per cent to HK$16.52 and Hua Hong Semiconductors leapt 2.7 per cent to HK$20.35 after Beijing unveiled a US$47.5 billion investment plan towards achieving self-sufficiency in its semiconductor industry.

With all the easing measures in place, investors will keep a close watch on the property market, which has a far reaching impact on the economy and therefore hold the key to the stocks rally sustaining. Investors are also awaiting the May data for manufacturing PMI, a leading economic indicator due later in the week. The Hang Seng Index has risen more than 6 per cent in May, and is headed for the fourth straight month of gains.

Elsewhere, Alibaba Health Information Technology surged 13 per cent to HK$3.46 after its financial results showed a net income increased 65 per cent for the financial year ended March from a year ago.

China Vanke added 0.3 per cent to HK$6.13 but its onshore share price dropped 2.4 per cent to 8.66 yuan in Shenzhen. The debt-stricken Chinese property developer sold an unfinished project for 2.24 billion yuan ($309 million) in a deal that could inflict a 1.8 billion yuan loss on the company.

Other major Asian markets were mixed. Japan’s Nikkei 225 slipped 0.2 per cent and Australia’s S&P/ASX 200 lost 0.3 per cent, while South Korea’s Kospi rose less than 0.1 per cent.

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