Asian shares rally after China pledges economic support steps
Asian shares jumped on Tuesday as China's pledge to step up policy support for its stuttering economy soothed sentiment and lifted beaten down Hong Kong and Chinese stocks, while the dollar eased ahead of the Federal Reserve meeting this week. MSCI's broadest index of Asia-Pacific shares outside Japan was 1.2% higher and on course to snap a six-day losing streak.
Japan's Nikkei fell 0.22%. The Shanghai Composite Index was 1.55% higher, while Hong Kong's benchmark Hang Seng Index surged 3.4% after China's top leaders pledged on Monday to step up policy support for the economy amid a tortuous post-COVID recovery, focusing on boosting domestic demand and signalling more stimulus steps.
Saxo Markets strategists said the meeting readout reflected a cautious approach to economic stimulus with limited commitments, pointing to explicit recognition of the challenges faced by the economy as a mildly bullish sign. China's property market remains a cause for concern among investors, with stocks and bonds in China's real estate industry sliding to around eight-month lows on Monday amid fears of a cash crunch at two of the country's biggest developers.
China will adjust and optimise property policies in a timely manner, in response to «significant changes» in the supply and demand relationship in the property market, state news agency Xinhua said late on Monday. Erin Xin, economist for Greater China at HSBC, said the readout could suggest further tweaking of property policies as well as a more supportive tone for the sector.
«We believe policymakers may remain cautious about financial risks, though they may provide further policy support to help stabilize the sector.» An index of mainland developers jumped 10.5% on Tuesday. In the
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