Chinese stocks soar as Obama visits Shanghai
In Asia Monday, China's Shanghai Composite Index added 2.7% to close at 3,275 and Hong Kong's Hang Seng Index rose 1.7%, ending the day at 9,791. In Japan, the Nikkei Index settled 0.2% higher to close at 9,791.
President Obama's first official visit to China will address a wide range of topics from global warming to the economy, and will also underscore the enormous trade deficit -- while Americans' love affair with cheap Chinese goods has buoyed the Chinese economy, Chinese customers have little need for expensive, American-made products. And as their economy continues to develop, it seems the Chinese can fill their own needs quite handily.
Chinese consumers, pockets filled with newly earned cash augmented with financial incentives from the $585 billion in government stimulus measures, are pushing automakers ever higher. Today Beiqi Foton Motor surged 5.4%, SAIC Motor climbed 4.2% and carmaker Dongan Heibao added 1.8%.
Household appliance companies also soared as Huangshi Dongbei Electrical Appliance hit its daily maximum increase of 10% today, after rising 10% on Friday. Huangshi Dongbei is a major refrigerator manufacturer and has won prizes in the past for manufacturing environmentally friendly refrigerators. Gree Electric Appliances, an air conditioner company, rose 3.2%.
In Hong Kong, China's biggest home appliance retailer Gome Electrical Appliances Holdings (GMLEY) rose 4.8%, but the territory's banks led the gains. China Citic Bank (CHBGF) climbed 3.7% after Goldman Sachs recommended the stock. Positive investor sentiment drove most major banks higher: China Construction Bank Corp. (CICHF) surged 3.7%, Industrial & Commercial Bank of China (IDCBY) rose 2.4%, Bank of China (BACHY) advanced 2.3 and China Merchants Bank (CIHHF) added 1.9%.
HSBC Holdings (HBC), the most heavily weighted stock on the Hang Seng, climbed 2.6% after confirming the sale of its London headquarter building in Canary Wharf to South Korea's National Pension Service. They will receive $1.29 billion for the property and plan to remain as tenants in the tower.
Despite announcing a 4.8% rise in Japan's GDP, most Japanese stocks closed lower today as investor's concerns were stoked by worries that the new government's policies would not pull the country out of the economic doldrums. Appliance maker Hitachi (HIT) plunged 8.5%, electronics maker Toshiba (TOSBF) plummeted 5.2% and NEC Electronics (NELTY) decreased 4.6%.
Japanese banks tumbled with Sumitomo Mitsui Financial Group (SMFJY) nose diving 5.9% and Mitsubishi UFJ Financial Group (MTU) losing 5.5 percent. Both banks have seen profits fall and are seeking financing. They are also both major lenders to the flailing Japan Airlines.
Japan is no stranger to economic woes, and today, it just didn't manage to keep up with its more confident Asian neighbors.