SHANGHAI: China stocks gained more than 1% on Thursday, bucking the trend in Asia, as investors snapped up battered property shares, betting Beijing will relax policies to prevent a sector-wide collapse.
The blue-chip CSI300 index rose 1.6%, to 4,898.65 points, while the Shanghai Composite Index gained 1.2% to 3,532.79 points.
The CSI300 Real Estate index, which tracks blue-chip property shares, surged 9% in its best day in nearly seven years. A broader property index jumped 6.8%.
Investors are piling into property stocks, which had been battered by strict government curbs and China Evergrande Group’s debt woes, as a slew of positive signals recently fan hopes for policy easing.
A think tank of China’s State Council met a local property association and financial institutions in Guangzhou, Chinese media reported on Thursday, days after the agency, which makes policy recommendations, held a similar meeting with developers and banks in Shenzhen.
On Wednesday, the Securities Times reported some real estate companies disclosed plans to issue debt in the interbank market at a meeting with market regulators. Some see it as a sign that developers’ financing conditions are improving.
Data showing a rise in new mortgage loans in October and news on Thursday that Evergrande bondholders received coupon payments from the indebted developer also aided sentiment.
“China needs to relax property curbs, because the industry is so important to economic growth,” said Liam Zhou, founder of Shanghai-based hedge fund house Minority Asset Management.
Bank stocks also rose in China and Hong Kong on receding fears that further defaults by developers would erode banks’ balance sheets.
Chinese brokerages shares also rose sharply on Thursday, as investors bet they will benefit from the imminent launch of the Beijing Stock Exchange.