New | Hong Kong and mainland shares advance, property stocks higher on upbeat housing data

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Hong Kong and mainland share markets cap the week on a positive note following ECB’s dovish tone on rate policy

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A man looking at a screen showing stock market at a bank in Tai Wai, Hong Kong . Photo: Felix Wong

Yu XieandBenjamin Robertson

Published: 8:15am, 23 Oct 2015Updated: 3:06pm, 30 Oct 2015

Hong Kong and Chinese stocks finished the week on a high note, following upbeat mainland housing data and comments by Europe’s central banking chief hinting at further monetary stimulus.

Shanghai and Shenzhen benchmark indices rose 1.3 per cent to 3,412.43 and 2.94 per cent to 2,016.74 respectively while Hong Kong’s Hang Seng index gained 1.34 per cent to 23,151.94.

Property stocks were standouts on both sides of the Hong Kong border after newly-released housing data showed new home prices rose for a fifth month in a row in September. Prices increased in 39 mainland cities last month, compared to 35 in August, while the number of cities experiencing price drops declined.

“There has been quite a rebound from the third quarter as individual [company] news is boosting sentiment,” said VC Brokerage director Louis Tse Ming-kwong.

In an announcement after the close of markets Friday, the People’s Bank of China said it cut the one-year benchmark bank lending rate 25 basis points and lowered bank’s reserve requirement ratio by 50 basis points, with the changes to take effect from Saturday.

China’s largest developer by sales, China Vanke, rose 2.94 per cent in Hong Kong to HK$18.18. Local developer Sun Hung Kai Properties rose 2.20 per cent to HK$106.7 and Henderson Land gained 2.71 per cent to HK$51.25.

China’s outstanding loans to new home buyers and property developers surged 20.9 per cent in September as buyers returned in spite of a worrying overhang of unsold inventory in China’s smaller cities. Many new buyers were drawn in by softer credit conditions, as the mortgage lending rate has been halved during the past year thanks to a succession of interest rate cuts.