Policy hopes extend China’s winning streak

Chinese stocks extended their winning run to a fourth session on Thursday as hopes of looser monetary policy continued to grip the market.

The Shanghai Composite index rose 1.1 per cent to 2,562.41, the highest since June 24. It has gained 5.7 per cent so far this week.

Signs of slowing growth and relatively muted inflation have fuelled hopes that some of the policy tightening introduced earlier this year might be unwound.

Deutsche Bank said that while no big policy relaxation was likely in the third quarter of the year, the fourth quarter could see some moves.

Jun Ma, economist at the bank, said: “By then, senior officials will likely publicly discuss the need to relax policies to guard against the risk of a ‘second dip’, and the government may begin to relax a few real estate policies and to signal the intention to reaccelerate public spending.”

Real estate shares led the market’s advance on Thursday on reports that a planned property tax would be levied in 2012, later than expected. The real estate sub-index rose 2.1 per cent, with Gemdale rising 2.4 per cent to Rmb6.85. In Shenzhen, China Vanke climbed 2.6 per cent to Rmb7.95.

The gains on the mainland helped Hong Kong reverse early losses, and the Hang Seng index finished 0.5 per cent higher at 20,589.70.

Steel stocks continued to advance after news that mainland steel prices had risen this week. Angang Steel gained 2.2 per cent to HK$11.96, taking its weekly rise to 16 per cent.

Tokyo was dogged by the persistent strength of the yen and the Nikkei 225 Average ended lower for a fifth successive session. The benchmark slipped 0.6 per cent to 9,220.88 as the yen hovered near a seven-month high against the dollar, depressing export-orientated stocks.

The Nikkei has now fallen 18.7 per cent from an 18-month high on April 5. The broader Topix index fell 0.5 per cent to 825.48.

TDK , the electronic components maker, tumbled 2.5 per cent to Y4,905, while Canon fell 0.8 per cent to Y3,330 and Honda Motor shed 0.5 per cent to Y2,586.

Weaker commodities prices weighed on trading companies. Mitsubishi slid 1.7 per cent to Y1,823, while Sumitomo shed 3 per cent to Y891. But Shionogi jumped 3.8 per cent to Y1,790 following positive news on an HIV drug developed by the company and GlaxoSmithKline.

Mumbai recorded its highest close for 2½ years as steelmakers advanced. JSW Steel rose 2.1 per cent to Rs1,200.55 after it said it would consider raising funds, including selling shares to a strategic investor. Tata Steel rose 1.9 per cent to Rs540.85 and Jindal Steel added 1.6 per cent to Rs646.95.

The BSE Sensex index rose 0.8 per cent to 18,113.15, its highest close since February 2008.

Seoul was hit by losses in the technology sector and the Kospi index fell 0.8 per cent to 1,735.53. Samsung Electronics fell 1.1 per cent to Won808,000, while Hynix Semiconductor tumbled 4.2 per cent to Won22,600.

Taipei also declined ahead of quarterly results from some key names in the sector. AU Optronics fell 1.4 per cent to T$29.30 and Mediatek shed 2 per cent to T$453. The weighted index lost 0.5 per cent to 7,666.34.

Australian stocks struggled in the face of losses for the banking sector, and the S&P/ASX 200 index slid 0.9 per cent to 4,374.7.

Jakarta retreated from Wednesday’s record high, in its first decline in three days. The composite index slipped 0.1 per cent to 3,009.92.