Stocks Buoyed by China Stimulus, Fed Outlook Hopes: Markets Wrap

(Bloomberg) — Stocks in Asia advanced as traders bet that China’s latest property stimulus measures will aid the economy and data suggested that US interest rates may be approaching a peak.

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Hong Kong benchmark indexes outperformed the region as investors resumed trading after a closure on Friday. Real estate stocks extended their advance, with a Chinese property shares gauge rising above 7% on stimulus measures taken to bolster the sector. Other major indexes also gained, while US markets are shut Monday for the Labor Day holiday.

Futures for European equities rose and those for the US steadied after the S&P 500 Index had its best week since June last week. West Texas Intermediate crude oil steadied after hitting the highest level since November on expectations that supply cuts by OPEC+ leaders will tighten the market. Brent remained near $90 a barrel.

The Chinese government last week said it will allow the nation’s largest cities to cut down payments for home buyers and encouraged lenders to lower rates on existing mortgages. The nationwide minimum down payment will be uniformly set at 20% for first-time buyers and 30% for second-time purchasers. Beijing and Shanghai followed through by lowering mortgage requirements for some homebuyers, while home transactions in China’s biggest cities soared over the weekend.

The recent measures have the potentials to “help restore homebuyers’ sentiment, moderately alleviate household interest payment pressure and pave the way for 4Q sales pick-up beyond seasonality,” according to Yi Wang, an analyst at Goldman Sachs Group Inc.

Sentiment was further propped up by news that distressed Chinese builder Country Garden Holdings Co. won approval from creditors over the weekend to extend a maturing yuan bond. Its shares jumped. However, the developer has just days to avoid default on some dollar bonds.

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The dollar edged lower after gaining Friday against major peers. There is no trading of cash Treasuries due to the US holiday.


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