(Corrects Hang Seng Index level in fourth paragraph)
* HSI +0.4 pct, H-shares -0.5 pct, CSI300 +0.6 pct
* Property sub-index at highest since December 16
* Hong Kong property shares also lifted
By Natalie Thomas and Chen Yixin
SHANGHAI, April 2 Mainland and Hong Kong
property shares surged on Wednesday pushing local indexes into
positive territory, after state media reported that several
cities may relax house ownership restrictions.
The CSI300 property sub index <.CSICMREI > was up 4.0
percent in morning trading, its highest level since December 16.
The spike was triggered by a Shanghai Securities Journal report
that local governments in Hangzhou and Changsha are considering
a range of policies to promote the market, citing anonymous
By Midday, the CSI300 index of the largest
Shanghai and Shenzhen A-share listings was up 0.6 percent, while
the Shanghai Composite Index added 0.4 percent to reach
The Hang Seng Index was up 0.4 percent at 20,121.53
points. The China Enterprises Index of the top Chinese
listings in Hong Kong dropped 0.5 percent.
A total of seven property companies listed in the Shanghai
and Shenzhen stock market hit their 10 percent daily limits on
the news, including Huayuan Property Co, Beijing
Dalong Weiye Real Estate Development Co and China
Calxon Group Co.
China's red-hot property market has lost some steam since
late 2013 as local governments tightened controls on speculative
buying, and as banks made it harder for home buyers and small
developers to get loans.
Investor reaction to Wednesday's report suggest many believe
the government could now be about to soften its stance on
"Previously, the government repeatedly talked about
controlling the property market, but now they aren't saying
anything about this and instead there have been signs of easing
policies," said Tian Weidong, head of research in Kaiyuan
Securities in Xi'an.
Tian said property shares could have room to rise further on
development in some second and third-tier cities as the Chinese
government continues its urbanisation drive.
A poll by real estate services firm E-House China EJ.N
released on Monday showed that prices of new homes in 288 major
cities rose 8.1 percent in March from a year earlier, easing
from February's annual rise of 9.1 percent.
Hong Kong property shares also posted gains, with the Hong
Kong property sub-index climbing 3.1 percent in morning trading.
China Resources Land Ltd rose 4.6 percent, Sun
Hung Kai Properties Ltd climbed 3.8 percent and
Country Garden Holdings Co Ltd jumped 6.7 percent.
Overall, property gains were mitigated by declines in
mainland bank and energy stocks, dragging the China Enterprises
Index into negative territory as fund managers sought to lock in
gains from the sectors.
Shares in Bank of China Ltd slid 1.45 percent,
while the Bank of Communications Co Ltd and Industrial
and Commercial Bank of China Ltd dropped 1.6 and 1.1
percent respectively, leaving the HSCE index of China shares in
Hong Kong down 0.5 percent at lunch.
"Today we have seen profit taking pressure on Chinese
Banking stocks, as previously those stocks benefited from the
new policy of allowing them to issue preferred shares," said Ben
Kwong, chief operating officer of regional brokerage KGI Asia.
(Reporting By Natalie Thomas; Editing by Shri Navaratnam)