By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) -- Real-estate stocks lead the action in
the largest Asian markets Monday, with tumbling property shares
leading Chinese bourses lower, but a real-estate rally lifting
Japanese equities to gains.
Among the Chinese benchmarks, the Shanghai Composite Index sank
2.5%, and Hong Kong's Hang Seng Index declined 1%. But Japan's
Nikkei Stock Average rose 0.6%.
Elsewhere, South Korea's Kospi traded down 0.3%, and Australia's
S&P/ASX 200 index declined 1.2%.
Property firms fell sharply in Shanghai and Shenzhen on Monday,
dragging down the broader market, with China Vanke Co. , Gemdale
Corp. and Poly Real Estate Group Co. all dropping limit-down by
about 10% each.
Those losses came after the Chinese government late Friday
announced fresh measures to take the heat out of the nation's
property sector, including higher down-payments and mortgage rates
on second homes in cities that have seen steep rises in property
prices. The policy moves also include a 20% capital gains tax on
existing-home sales.
"The edict marked a reversal of an implicit softening of
property controls since spring 2012. ... Markets should definitely
take the edict seriously and be prepared for falling prices of
related financial assets," said Bank of America Merrill Lynch
strategist Ting Lu.
Ahead of the start Tuesday of the annual session of the National
People's Congress, China's parliament, "the edict is effectively
the last policy announcement of Premier Wen [Jiabao]'s 10-year
cabinet," he said.
Lu said that curbs on the property sector are unlikely to
represent a turning point for Chinese economic policy, however.
"We believe China's policy stance in the first half of 2013 is
still growth-supportive," he said.
Property weakness on the mainland spread to Hong Kong as well,
where China Resources Land Ltd. lost 7.7%, and China Overseas Land
& Investment Ltd. (CAOVY) fell 5.2%.
On the other hand, property names were particularly strong
performers in Tokyo on Monday. Among them, Mitsui Fudosan Co.
(8801.TO) climbed 3.8%, Sumitomo Realty & Development Co.
(8830.TO) advanced 4.8%, and Mitsubishi Estate Co. (MITEF) surged
9.6%.
Japan's gains -- the only advance among the major Asian stock
markets Monday -- came amid losses for the yen after upbeat U.S.
data on consumer confidence and manufacturing helped push both Wall
Street stocks and the dollar (USDJPY) higher on Friday.
The greenback bought Yen93.28 Monday, off from Yen93.58 yen in
North American trade Friday but above late Thursday's Yen92.63
level. Read: Stocks end session, week on a high note
Crédit Agricole strategist Adam Myers said he's expecting
continued yen weakness against the greenback, in part as investors'
easing expectations have been "firmly supported" by last week's
nomination of Haruhiko Kuroda as the new governor of the Bank of
Japan.
The financial and real-estate sectors would likely be among the
biggest beneficiaries if Bank of Japan policy spurs the Japanese
economy to solid inflation.
Meanwhile, Friday's strength in the U.S. dollar worked to
pressure prices for metals in New York, where gold ended at its
worst level since July last year, and copper futures fell to a
three-month low. Read: Gold down a third day, at lowest since
mid-July
Against that backdrop, Sydney-listed miners fell on Monday, with
the sector down 2.8%.
Rio Tinto Ltd. (RIO) fell 3.2%, BHP Billiton Ltd. (BHP) --
trading ex-dividend -- slipped 1.6% on an adjusted basis, while
Fortescue Metals Group Ltd. (FSUMY) declined 3.2%.
Hong-Kong listed Russian metals giant United Co. Rusal PLC lost
3% after the firm said that it will cut 300,000 tons from its
aluminum output by the end of 2013. The firm also reported
fourth-quarter revenue of $2.6 billion.
South Korean stocks received some support from an advance for
market major Samsung Electronics Inc. (SSNLF), which rose 0.3%
after a U.S. court on Friday issued a ruling that slashed the
amount of damages the firm has to pay arch-rival Apple Inc. (AAPL)
by around 43% to just under $600 million.
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