Friday, April 4, 2014

Asia Up with US Jobs, China Mini-Stimulus

Asia equities were mostly higher with US companies hiring more, and China outlining stimulus plans.

China’s leaders announced a mini stimulus to nudge growth towards Premier Li Keqiang’s 7.5% target after recent data highlighted soft spots in the economy. The government has pledged more tax breaks for smaller companies, housing upgrades for low-income households, and to plough ahead with railway system reforms.

Hong Kong’s Hang Seng rose 0.2%, while the Hang Seng China Enterprises Index climbed 0.7%. China Railway Group, China Railway Construction and Anhui Conch were among gainers.

But the Shanghai Composite fell 0.7%, thanks to losses in bank and property stocks, and
official data showing the services sector was a little less busy in March. The Shanghai property index slid 1.9% after state-owned newspaper China Securities Journal ran a front-page commentary arguing that curbs on buying homes should stay, as demand is still far ahead of supply in first- and second-tier cities.

In Southeast Asia, Malaysia’s KLCI 0.2% Indonesia’s JCI rose 0.4%. Singapore’s STI notched 0.8% higher as Noble Group extended gains after China’s largest grain trader Cofco agreed to fork out USD1.5 billion for a majority stake in its agricultural trading unit. LionGold however fell nearly 17% after it said two executives were being investigated for white-collar crime. Magnus Energy Group and Innopac Holdings joined the ranks of those being investigated for possible breaches of the Securities and Futures Act.

India stocks fell after making nine consecutive record highs, as a slide in domestic bonds threatened to mar the value of state-run banks’ debt portfolios. 10-year bond yields reached 8.9952%, the highest since 6 December, triggering fears of mark-to-market losses.