China stocks suffer in thin holiday trade

24 April, 2019 12:00 AM printer

TOKYO: Chinese stocks closed lower Monday on speculation authorities would limit monetary policy easing after signs of stabilisation in Asia’s top economy but trade was lacklustre with many markets closed for Easter.

After initially opening on a positive footing, the benchmark Shanghai Composite Index closed down 1.70 percent, or 55.76 points, to close at 3,215.04.

The Shenzhen Composite Index, which tracks stocks on China’s second exchange, was off 1.51 percent, reports AFP.

The weakness came after the Politburo, China’s top decision-making body, said on Friday the government would continue to implement a proactive fiscal policy and a prudent monetary policy that is neither too tight nor too loose.

Investors had interpreted that as meaning “that the government will suspend the easing of monetary policy,” said Shen Zhengyang, an analyst at Northeast Securities.

“Large caps like financials and the real estate sectors suffered big losses today accordingly,” he added.

Real estate property firm Vanke dived more than six percent and China Construction Bank was lower by more than three percent.

Japanese stocks went the other way — opening lower but closing higher although volumes were thin ahead of an unprecedented 10-day market closure in Japan to celebrate the enthronement of a new emperor on May 1.

The benchmark Nikkei 225 index rose 0.08 percent while the broader Topix index was up 0.10 percent.

Hideyuki Ishiguro, strategist at Daiwa Securities, said there was a lack of “fresh market-moving events” driving trade early Monday.

And investors are looking “to take profit ahead of 10 days of holidays during which key Chinese and US economic data are due,” Ishiguro said.

Traders may also be holding fire as they await a two-day meeting of the Bank of Japan later in the week. Some companies, including gaming giant Nintendo, are also unveiling their latest results.