Chinese Building Boom and U.S. Optimism Boost Asian Shares

China's building boom, combined with mandated energy cuts that have constrained supply, are driving cement and steel stock prices higher.
China's building boom, combined with mandated energy cuts that have constrained supply, are driving cement and steel stock prices higher.

Asian markets climbed higher Thursday. In China, the Shanghai Composite Index gained 1.3% to close at 2,898 and in Hong Kong the Hang Seng Index added 0.1% to end the day at 23,055. Japan's Nikkei 225 Index inched up 0.5% to 10,080.

China investors piled money into cement stocks this Thanksgiving Day, taking a gamble that prices will surge as supplies continue to dwindle. Since September, a limit on the amount of power supplied to cement plants has taken its toll on supply, sending prices soaring 40% from their August levels. The government has restricted power to the plants to curb usage and meet energy-consumption reduction targets, and according to, some cement firms reported a drop in monthly output of at least 40%.

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In the midst of the country's largest building boom, where forests of concrete slab towers are rising with amazing speed, cement is certainly in high demand. On Thursday, Tangshan Jidong Cement rocketed up 8.4%, Anhui Conch Cement (AHCHF) climbed up 5.8% and Gangsu Qilianshan Cement surged 4.1%.

Steel and other metal producers also have endured forced energy cuts, sending prices higher. According to Bloomberg, the cuts could result in a 9.6% drop in steel supply by the end of the year. Zhuzhou Smelter shares jumped 8.7%, while Baoshan Iron & Steel gained 1.9% Thursday and Maanshan Iron & Steel (MAANF) advanced 0.9%. Meanwhile, Aluminum Corp. of China added 1.3%.

Other Chinese building-related shares also climbed. Sany Heavy Industry, a maker of concrete pumps, concrete pumping vehicles and machinery used to pave roads, zipped up 8.2% and Guangxi Liugong Machinery surged 4.6%.

U.S. News Boosts Hong Kong Shares

In Hong Kong, a bit of positive news out of the U.S. sent shares higher. Falling unemployment and increased spending came as a welcome relief for retail supplier Li & Fung (LFUGY), which sources clothing, toys and other items from all around Asia and sells them to Walmart (WMT), Target (TGT) and other popular shopping destinations. The supplier's shares zipped up 4.6%.

Esprit (ESHDF), which relies heavily on sales in both the U.S. and Europe, shot up 3.2% and Yue Yuen (YUEIF), probably the maker of your favorite sports shoes, gained 0.6%.

Not all Asian stocks went up on Thanksgiving, of course. One consumer stock that didn't fare well was Sparkle Roll Group, the Chinese distributor for Rolls-Royce, Bentley and Lamborghini. A fall in profit for the first half of the year sent shares tumbling 2.8%. The company also deals in high-end products like Federico Buccellati Jewelry and Duclot wines, and has been backed by Morgan Stanley to the tune of $42 million, the Financial Times says.

In Japan, exporters also rode the wave of improved U.S. consumer sentiment. Gainers included Toyota (TM), which advanced 1.1%; Casio Computer (CSIOY), which climbed 0.9%; and Sony (SNE), which added 0.8%. Among electronic-component companies, Alps Electric (APELF), a maker of automotive parts, jumped 2.9%; Tokyo Electron (TOELY) grew 2.3%; and Sumitomo Electric Industries rose 2%.

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