Asia stock markets mixed amid Chinese property sector sell-off


(c) Reuters. FILE PHOTO A man walks by an electronic board outside a Tokyo brokerage showing Japan’s Nikkei index and stock prices on March 17, 2023. REUTERS/Androniki Christodoulou/File Photo

By Scott Murdoch

SYDNEY (Reuters) – Asia stock markets weakened on Monday as investors in China sold off shares in property developers, remaining unconvinced by authorities’ efforts to revive activity in the mainland real estate market.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3%, after U.S. stocks ended the previous session with mild gains.

Australian shares reversed earlier losses to be up 0.12% and stock index slid 0.19%.

In Hong Kong, the was down 1.4%, as investors retreated from China’s troubled property sector.

The Hang Seng Property Index, a gauge of Hong Kong’s top developers, shed almost 4% while the mainland property index was off 3.24%.

“We need the property market to stabilize first in order for any meaningful kind of economic rebound to happen in China,” said David Chao, Invesco’s Asia Pacific market strategist.

“We are not calling for a property rebound but we want to see some stability.

“We are seeing investment down in the mid to high single digit level year on year, there is still softness in those tier 2 and 3 cities which is why we have seen a slew of measures in those areas. These measures should help stabilize the property market in the near future. “

In recent weeks China’s authorities – including the housing ministry, central bank and financial regulator – have rolled out a series of measures, such as easing borrowing rules, to support the debt-riddled property sector, and there are some expectation for more steps to revive demand in major ciities like Beijing, Shanghai and Shenzhen.

Hong Kong stocks were also dampened as e-commerce giant Alibaba (NYSE:) Group dropped 3.1% on the surprise departure of outgoing CEO Daniel Zhang from its cloud unit.

China’s bluechip CSI300 Index was up 0.37%.

In the United States, the Consumer Price Index (CPI) for August, due out on Wednesday, is expected to rise 0.6% month-on-month for August, which would take the year on year rate to 3.6%, according to a Wells Fargo research note.

Investors are pricing in a 93% probability that the Fed will keep rates at current levels after its next meeting ends on Sept. 20 but only a 53.5% change for another pause at the November meeting, according to CME group’s FedWatch Tool.

The yield on benchmark rose to 4.2939% compared with its U.S. close of 4.256% on Friday. The yield on benchmark rose to 4.2939% compared to its U.S. closing of 4.256% on Friday.

In China there has been a easing of the deflationary forces with the consumer price index (CPI), which rose 0.1% from a year ago in August. This was slower than Reuters’ median estimate of a 0.2% rise, but still much higher than a decline of 0.3% in July.

China’s factory prices also dropped the least in five months. The producer price index fell 3.0% from a year earlier, in line with expectations, after a drop of 4.4% in July.

Global energy markets are also keeping a close watch on Chevron Corp (NYSE:)’s negotiations with its workers after strikes began at key liquefied (LNG) facilities in Australia that supply 5% of the world’s output

European gas prices have been volatile since August when news of the potential labour unrest first broke.

Gas prices spiked as much as 14% after Friday’s news that strikes would start following five days of talks which resulted in no deal.

The dollar on Monday dropped 0.85% against the yen to 146.56 . The dollar fell 0.85% against the yen on Monday to 146.56. The euro was up 0.2% in the morning at $1.0709 after losing 1.09% over the past month. Meanwhile, the dollar index, which measures the greenback’s value against other major trading partners was down by 0.114% to 104.73.

China’s central bank lifted the yuan from a 16-year low versus the dollar by setting the highest daily midpoint rate ever recorded, signaling increased discomfort over the currency’s recent weakness. The price of oil fell by 0.21%, to $90.46 a barrel.

traded slightly higher, at $1.918.3663 an ounce.