Asian stock markets weaken amid continued decline from China’s real estate sector

SYDNEY (Reuters) – Asian stock markets weakened on Monday as investors in China sold shares in property developers, remaining unconvinced by authorities’ efforts to revive activity in the mainland’s property market.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 0.3%, after US stocks ended the previous session with slight gains.

Australian shares (.AXJO) reversed earlier losses to rise by 0.12%, and the Japanese stock index (.N225) fell by 0.19%.

In Hong Kong, the Hang Seng Index fell 1.4%, as investors retreated from China’s troubled real estate sector.

The Hang Seng Real Estate Index (.HSNP), a measure of Hong Kong’s top developers, fell nearly 4% while the Mainland Property Index (.HSMPI) fell 3.24%.

“We need to stabilize the property market first for any kind of meaningful economic recovery to occur in China,” said David Chow, Asia-Pacific market strategist at Invesco.

“We are not calling for a real estate recovery but we want to see some stability.

“We are seeing a decline in investment in the mid- to high-single digits year-on-year, and there is still weakness in those tier-II and tier-III cities, which is why we have seen a significant number of actions in those areas. These should put a lower bound on the market.” Real estate sometime soon.”

In recent weeks, Chinese authorities – including the Ministry of Housing, the Central Bank and the Financial Regulatory Authority – have launched a series of measures, such as easing borrowing rules, to support the debt-laden real estate sector, and there are some expectations for further steps to revive the real estate sector. Demand in major cities such as Beijing, Shanghai and Shenzhen.

Hong Kong shares also fell, with e-commerce giant Alibaba Group (9988.HK) falling 3.1% following the surprise departure of outgoing CEO Daniel Zhang from its cloud unit.

China’s CSI300 Index (.CSI300) rose 0.37%.

In the United States, the Consumer Price Index (CPI) for August, due on Wednesday, is expected to rise 0.6% month-on-month for August, which will bring the annual rate to 3.6%, according to a Wells report. Fargo research note.

Investors expect a 93% probability that the Fed will keep interest rates at current levels after its next meeting ends on September 20, but only a 53.5% change for another stop at the November meeting, according to CME Group’s FedWatch tool.

The yield on the benchmark 10-year Treasury bonds rose to 4.2939%, compared to its close in the United States at 4.256% on Friday. The two-year yield, which rises as traders anticipate higher Fed funds rates, reached 5.0033% compared to the US close of 4.984%.

In China, deflationary pressures eased with the CPI rising 0.1% in August compared to the previous year. That was slower than the average estimate for a 0.2% increase in a Reuters poll but much stronger than the 0.3% decline in July.

China also saw the smallest decline in factory prices in five months. The producer price index fell 3.0% from a year earlier, in line with expectations, after a 4.4% decline in July.

Global energy markets are also closely watching Chevron (CVX.N) negotiations with its workers after strikes began at key liquefied natural gas (LNG) facilities in Australia that provide 5% of the world’s production.

European gas prices have been volatile since August when news of potential labor unrest first emerged.

Gas prices rose as much as 14% following news on Friday that strikes would begin after five days of talks that resulted in no agreement.

On Monday, the dollar fell 0.85% against the yen to 146.56 yen. It is still some distance from this year’s high of 147.87 reached earlier this month.

The single European currency rose 0.2% on the day to $1.0709, after losing 1.09% in a month, while the dollar index, which tracks the US currency against a basket of currencies of other major trading partners, fell 0.114% to 104.73.

China’s central bank plucked the yuan from a 16-year low against the dollar on Monday by setting a daily guidance rate at the midpoint with its strongest bias ever, signaling growing alarm over the currency’s recent weakness.

In the spot market, the local yuan was trading at 7.3245 to the dollar by 0210 GMT, after hitting 7.3510 on Friday, down 6.1 percent from the beginning of the year and a level last seen during the global financial crisis.

US crude fell 0.57 percent to $87.01 a barrel. Brent crude fell by 0.21% to $90.46 per barrel.

Spot gold was trading slightly higher at $1,918.3663 an ounce.

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