China Measures Boost Hong Kong Shares

Published May 14, 2014

| Dow Jones Newswires

Hong Kong stocks jumped higher on Wednesday, supported by sharp gains in the property sector, although Australia and Japan made small losses.

The Hang Seng Index was up 1% to 22582.77 after the People's Bank of China announced measures to spur mortgage lending against the backdrop of a weakening property market. China Resources Land jumped 6% and China Overseas Land & Investment gained 4%.

Banks were also supporting Hong Kong, with Bank of China up 1.8% , after it said it plans to raise 100 billion yuan ($16 billion) in preferred shares--the third Chinese bank to announce plans to raise capital in recent weeks.

More broadly, stocks in Asia lacked a clear direction as much of the region didn't react to Wall Street hitting another new high overnight. Although the Dow Jones Industrial Average (DJI) closed at a record for the third consecutive session on Tuesday, the gain was a marginal 0.1%.

Some markets did push higher, however, with Singapore's Straits Times Index up 1% late in Asia as the index caught up with the region's gains on Tuesday, when the market was shut due to a public holiday. South Korea's Kospi added 1.4% to 2010.83.

Japan's Nikkei Share Average fell 0.1% to 14405.76, as the yen (USDJPY) strengthened a touch against the dollar. The Japanese currency was last trading at Yen102.10 to the dollar, compared with Yen102.25 late Tuesday in New York.

Weak earnings weighed on the Nikkei, with Nikon Corp. falling 4% after the company said that its group fiscal year operating profit came to Yen62.94 billion ($615.9 million), up from the prior year's Yen51 billion, undershooting expectations as digital camera sales continued to struggle.

Australia's S&P/ASX 200 fell 0.1% as the market was weighed by falls in banking stocks that went ex-dividend--meaning that the shares started to trade without the right to the latest dividend. Westpac Banking fell 2.7%, Macquarie Group lost 1.4%, and National Australia Bank was 2.6% lower.

Also in Sydney, Commonwealth Bank of Australia added 1.2% after it reported a strong rise in its fiscal third-quarter earnings as bad debt charges fell and costs were tightly controlled.

Australian stocks shrugged off the federal budget, which was announced on Tuesday after the market closed, as it wasn't as harsh as expected for the 2014 to 2015 fiscal year, though it could be a headwind for economic growth.

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