Asian shares mixed as China kicks off congress

Investors at a Shanghai securities brokerage. Chinese stocks yesterday surged to their highest since August 2015 as President Xi Jinping pledged to build a "modern socialist country".
Investors at a Shanghai securities brokerage. Chinese stocks yesterday surged to their highest since August 2015 as President Xi Jinping pledged to build a "modern socialist country".PHOTO: BLOOMBERG

Chinese stocks at 26-month high amid pledge to boost economy, but S-E Asia mostly lower

China's stocks hit a 26-month high yesterday as a twice-a-decade Communist Party congress began with promises to boost the economy.

But the mood was decidedly different in South-east Asia, where most bourses fell.

Chinese stocks surged to their highest since August 2015, but Mr Koon Chow, an emerging markets macro and foreign exchange strategist at UBP, warned investors not to read too much into Chinese financial markets during major political events.

"During these events, state-owned financial institutions have an incentive to be supportive of their own markets," he said.

President Xi Jinping pledged to build a "modern socialist country" for a "new era", and said China would relax market access for foreign investment, expand access to its services sector and deepen market-oriented reform of its exchange rate and financial system, while strengthening state firms.

 

Elsewhere, Hong Kong edged up 0.1 per cent to post a fifth successive day of gains that have left it at a 10-year high, while Sydney was marginally higher. Tokyo ended up 0.1 per cent at another 21-year high - its 12th straight rise.

However, Seoul dropped 0.1 per cent and Philippine shares ended 0.78 per cent lower.

"Profit-taking is driving the (Philippine) market. It has been on an uptrend for several weeks in anticipation of a successful operation in Marawi," said Mr Manny Cruz, an analyst at Asiasec Equities.

President Rodrigo Duterte on Tuesday declared the southern city of Marawi liberated from pro-Islamic State in Iraq and Syria militants, signalling the end of a battle that killed more than 1,000 people.

The successful military operation "was used as an excuse" by investors to cash in their recent gains, Mr Cruz said.

Markets in Singapore and Malaysia were closed for a holiday.

Thai shares ended 1 per cent lower after clocking their biggest intraday drop in nearly a year.

Data showing a 21.9 per cent surge in automobile sales in Thailand - the regional vehicle production and export base for the world's top carmakers - had little impact on traders.

Indonesian stocks also fell, dragged down by telecommunication shares.

Telkom Indonesia was the worst performer in the benchmark even after the country's Ministry of Communication and Informatics said the telecom giant's unit is set to win a government auction for 2.3GHz spectrum.

REUTERS, AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on October 19, 2017, with the headline 'Asian shares mixed as China kicks off congress'. Print Edition | Subscribe