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China stocks add to gains on report of more government support for the property market

Published 02/06/2023, 07:52 pm
© Reuters.

Chinese equities had a strong day as markets cheered the approval of a deal to raise the U.S. debt ceiling and avert a default. The Hang Seng had its best day in three months while Japan’s Nikkei 225 index hit fresh 33-year highs.

China stocks received a further boost after Bloomberg News reported that the government is considering a new basket of measures to support the property market. Some of the ideas that are discussed include reducing the down payment in some non-core neighborhoods of major cities, lowering agent commissions, as well as further relaxation of constraints for residential purchases, the report added.

"The basic picture was one of regression," Bloomberg Economics and Intelligence analysts Chang Shu and Kristy Hung said recently.

"Despite signs of steadier activity, though, the sector is still sick."

The government has been discussing new measures as the country's two largest real estate developers – Wanda and Evergrande – continue to struggle. The former has been seen selling assets to boost liquidity while the latter is still trying to win support from creditors.

US-listed Alibaba (NYSE:BABA) shares are up 2.2% in pre-market Friday while Pinduoduo (NASDAQ:PDD) gained 3.4%.

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