China stocks end up as energy offsets fresh property curbs

Business Monday 20/March/2017 12:28 PM
By: Times News Service
China stocks end up as energy offsets fresh property curbs

Shanghai: China stocks recouped earlier losses to end slightly higher on Monday, as strong gains in energy stocks offset weakness in developers following fresh measures to cool the property market.
The blue-chip CSI300 index rose 0.1 percent, to 3,449.61 points, while the Shanghai Composite Index added 0.4 per cent to 3,250.81 points.
The impact of earlier property cooling steps by many cities may have been short-lived, data showed on Saturday. China's home prices picked up speed again in February after slowing in the previous four months, while sales surged.
Over the past week, a number of local governments have stepped up restrictions on property investment, and the central government vowed to control bank lending to the property sector.
An index tracking the property sector posted its worst day in three months, after more cities imposed fresh property restrictions over the weekend.
Investors in China are being torn between recent data showing a resilient economy and fears that expected policy tightening, while gradual, will eventually lead to higher borrowing costs and stunt business activity.
Last week, the country's central bank raised short-term interest rates for the third time in as many months in the immediate wake of the US rate hike.
"The market is concerned about two things: whether the economic recovery is sustainable, and the reality of tighter liquidity," Galaxy Securities said in its latest strategy report.
The brokerage added that upbeat economic data offers "trading opportunities" for investors, but warned investors that the recovery may fade in the second half, when tighter liquidity will also add pressure to the market.
Sector performance was mixed.
While property stocks dragged on the market, energy firms rallied strongly, led by heavyweight China Shenhua after the country's largest coal miner announced a spectacular dividend payment proposal.
Shares in the coal miner surged by their 10 per cent trade limit to close at a 19-month high, as the company proposed to pay total dividend of 59 billion yuan ($8.54 billion) in cash after recording a 40.7 per cent increase in net profit for 2016.