Bargain Hunting in China Props Up Market, Shares in Hong Kong and Tokyo Fall

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Asian Markets were mixed Friday. In China the Shanghai Composite Index surged 1.4% to 2,715 and in Hong Kong the Hang Seng Index lost 0.5%, falling to 23,877. In Japan the Nikkei 225 tumbled 1.6% to end the day at 10,275.

Bargain hunters poured money into Chinese shares today after seeing valuations fall to their lowest point in more than three months yesterday. Worries over upcoming tightening measures were brushed aside and investors, who were spooked by the implementation of new property taxes in sprawling cities like Shanghai and Chongqing, grabbed up shares in the same companies they'd sold off yesterday.

Chinese property companies surged after news broke that China's largest mutual fund company, China Asset Management boosted its proportion of real estate holdings by 6% up to 13%, reports Bloomberg. The industry also benefited from a positive endorsement from Goldman Sachs. Other property firms also climbed with Poly Real Estate surging 3.5% and China Vanke jumping 2.9%.

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Banks rose despite China Asset Management's reducing holdings in the sector. Industrial & Commercial Bank of China shot up 1.7%, Agricultural Bank of China gained 1.6%, China Minsheng leaped 1.2% and Bank of Communications advanced 0.9%.

In Hong Kong, property shares tanked with losses accrued by Henderson Land, which slid 1.3%, New World Development, which lost 1.1% and Sino Land, which slipped 0.9%. But some developers gained with Hang Lung advancing 1.2% and Cheung Kong adding 0.2%.

Other big losers included energy producers. Oil companies closed lower with Cnooc falling 2% and PetroChina declining 1.5%. And it was no better for coal-based firms, with China Coal falling 2.3% and China Shenhua dropping 2%.

Chinese Banks in HK Miss Out on Mainland Rebound

Unlike their Chinese counterparts, shares in Chinese banks tumbled in Hong Kong. Industrial & Commercial Bank of China declined 1%, Bank of China lost 1% and Bank of Communications dipped 0.5%. Locally-based HSBC, however, edged up 0.3%.

Big movers on Hong Kong's exchange included Cathay Pacific, which sank 5.8%. According to, a site devoted to Filipino issues, a Filipino flight attendant died in Hong Kong's airport yesterday after working a shift on a 12-hour flight from Italy. Meanwhile, Tencent, China's fast-growing Internet company, best known for its instant-messaging service, fell 2.8%.

Sell-Off in Commodities Weighs on Nikkei

In Japan there was more bad news. Investors snatched money away from commodities trading firms after prices for metals and oil fell. Mitsubishi Corp. slumped 4.5% and Mitsui & Co. dropped 3.3%. Marubeni Corp., a trading company dealing in metals, energy, food and chemicals sank 3.8%.

Among commodities companies, oil exploration firm Inpex fell 3.2%, Nisshin Steel dived 4.6%, Kobe Steel plunged 3.3% and JFE Holdings plunged 2.4%.

Positive news out of the U.S., where home sales unexpectedly jumped 12% last month, wasn't enough to bolster shares in Japanese exporters today -- investors had their eyes on Chinese interest rates, which could be set to rise again. Sony plunged 3.7%, Pioneer sank 2.7% and Sanyo lost 1.5%. Casio Computer was down 2.3% and Canon fell1%.
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