Asia mixed, Shanghai falls behind peers – CNBC

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Most major Asian markets advanced on Thursday, taking cues from overnight gains in U.S. equities that followed a rise in oil prices, but Chinese stocks fell behind their regional peers and extended losses from the previous session.

Australia’s ASX 200 closed up 56.74 points, or 1.09 percent, at 5,272.70, lead by a 5.74 percent increase in the energy subindex. Japan’s Nikkei 225 added 457.08 points, or 2.7 percent, to 17,363.62, extending gains from the previous two sessions on the back of a relatively weaker yen. Across the Korean Strait, the Kospi climbed 16.27 points, or 0.81 percent, to 2,022.10. In Hong Kong, the Hang Seng index was up 1.44 percent as of 3:03 p.m. HK/SIN time.

Chinese markets extended Wednesday’s losses. The Shanghai composite closed down 19.98 points, or 0.67 percent, at 2,952.60, after falling as much as 4 percent at one point in the Wednesday session. The Shenzhen composite fell 22.98 points, or 1.22 percent, to 1,848.52.

Hao Hong, chief strategist and head of research at BOCOM International, told CNBC Wednesday’s market moves were explained by a “large shortage of liquidity this month, created by tax payment and medium-term lending facility (MLF) [contracts] due.”

The People’s Bank of China did a seven-day reverse repurchase agreement of 250 billion yuan on Wednesday, which Hong said was not enough to offset the shortage. Still, he said the prospects of imminent monetary stimulus were limited given the relative strength of the housing market.

On Monday, data showed China’s home prices in 70 major cities increased 4.9 percent on-year in March.

Hong explained it is likely that the PBOC is “watching the property price surge very closely, and is giving property price much weight in making monetary policy,” which further makes it unlikely that the the Chinese central bank will ease in the near term. “It has chosen to use shorter term liquidity tools instead.”

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