Asian Markets Rise on Stellar Chinese Industrial Production Numbers
Shares in Asia rose Monday. In Hong Kong the Hang Seng Index climbed 1.9% to 21,658 and in China the Shanghai Composite Index advanced 0.9% to 2,688. In Japan the Nikkei 225 Index was also up 0.9% to 9,322.
Better-than-expected industrial production numbers coming out of China boosted investor's confidence in Asian economies. Instead of the dive many were expecting from the Chinese economy, statistics out of Beijing show that industrial production rose 13.9% in August as compared to a year before.
Further, consumer prices climbed 3.5% and retail sales increased 18.4%.
These are all very healthy numbers, further bolstered by a rise in new loans, with China Daily reporting that lending increased to 545.2 billion yuan ($80.53 billion) in August, up from 532.8 billion yuan in August. With all this cash on hand, it's only logical that retail sales should increase and online sales show just that. According to China Daily, Chinese e-commerce sites more than doubled their business since last year with sales reaching $31 billion dollars in the first six months of the year.
In China, Beijing Wangfujing Department Store Group shot up 4.8%, GD Midea, a maker of household appliances from omnipresent rice cookers to vacuum cleaners and electric generators, soared 4.3% and Suning Appliance, which runs a chain of electronics and appliance stores, surged 3.5%.
In the pharmaceutical sector, Guangzhou Pharmaceutical and Guangzhou Baiyunshan Pharmaceutical rocketed up on a promise to ramp up research into treatment for drug-resistant bacterial infections. Guangzhou Pharmaceutical rallied 9.4% and Baiyunshan rocketed up 8.3%.
Hong Kong benefited from China's positive news and companies dependent on Chinese consumption advanced. Esprit, which plans a massive expansion into China, rose 4% and China Resources, a distributor of everything from food to fashion, added 2.1%. Hang Seng newcomer Belle International rallied 2.4% and Li & Fung rose 0.7%.
Among Hong Kong-listed telecom companies, China Unicom surged 3.8% and Tencent, which has its own online payment service called Tenpay, and an e-commerce website called Paipai.com, advanced 2.1%.
Hong Kong developers were in positive territory with investors hoping that plans to tighten property investment rules will be shifted to the back burner. Wharf Holdings, whose malls profit from the increase in cash in Chinese tourists' pockets, registered a 3.7% gain, China Resources Land advanced 2%, China Overseas rose 1.9% and Henderson Land climbed 1.6%.
Japanese firms providing auto components were big winners today with GS Yuasa motoring up 5.1%. GS Yuasa makes storage batteries for everything from computers to cars. Car audio system maker Clarion rose 4% and car electronics maker Alps climbed 3.1%.
In Japan a less gloomy outlook for the global economy pushed building-related shares higher. Furukawa, a maker of heavy machinery including drills and bulldozers, rallied 7.1% and Meidensha shot up 5.2%. In addition to manufacturing large equipment, Meidensha makes industrial robots like the seat-mounted driving robot that simulates driving for vehicle performance evaluations. Machine tool company, Okuma, advanced 3.6% and hydraulic pump maker, Ebara, was up 3.5%.
Building firms with projects all over the world also headed north with Kajima up 1.5%, Obayashi advancing 0.9% and Taisei adding 0.6%. While projects might be scarce in places like the U.S., where decision-makers are hesitating over funding new projects, perhaps Japanese contractors will turn their attention to bidding on ventures in China where the money is still flowing.