Chinese key stock index ended 0.3 percent higher on Friday, with property issues strong on earnings and bonus share plans and after improved foreign direct investment (FDI) data for December. The Shanghai Composite Index ended at 3,224.152 points, eking out a 0.9 percent weekly gain.
The market was hit by heavy selling earlier this week after the Chinese central bank surprised by raising the proportion of deposits that banks must hold in reserve. Gaining Shanghai A shares outnumbered losers 549 to 321, while turnover eased to 151 billion yuan from Thursday's 168 billion yuan.
Bolstering sentiment was news that China attracted $12.1 billion in inbound foreign direct investment in December, up 103 percent from a year earlier, suggesting its robust economic recovery was on track. Property shares were strong, with Wolong Real Estate Group, one of the most actively traded Shanghai stocks, rising its 10 percent daily limit to 16.97 yuan after saying its net profit for 2009 rose 33.27 percent.
The company also said it planned to offer investors generous eight-for-10 bonus shares plus a 0.1 yuan per share pre-tax cash dividend, pending shareholder approval. The Shanghai Property Index was up 1.83 percent at 4,423.553 points. It has lost 11 percent since December, amid an official clampdown to prevent asset bubbles via steps to cool the property market. Property industry heavyweight China Vanke advanced 1.1 percent to 10.14 yuan.
"The property sector dropped so much but has begun to stabilise and the index is expected to be rangebound next week," said Chen Huiqin, senior analyst at Huatai Securities in Nanjing. Analysts said investor sentiment had partly recovered from central bank tightening. The index was seen moving between its 125-day moving average of 3,117 points to around 3,350 points.
But sentiment was somewhat cautious, partly because China is due to release key economic indicators next Thursday. "Investors are awaiting next week's economic data to gauge the direction of further policy measures after the central bank's sudden move this week," said Xu Yinhui, senior analyst at Guotai Junan Securities in Shanghai. Financial shares were mixed, with the top lender Industrial and Commercial Bank of China edging down 0.2 percent to 5.08 yuan.
China Pacific Insurance Group, the country's third-biggest life insurer, climbed 1.45 percent to 24.42 yuan after saying life insurance premium income in 2009 reached 67.6 billion yuan, up 8 percent from 66.1 billion yuan in 2008. Hong Kong shares closed down 0.29 percent by Friday as profit-taking on certain stocks offset gains in technology counters including Foxconn, which rose after bellwether Intel Corp reported a quarterly profit that beat expectations.
The benchmark Hang Seng Index ended down 62.79 points at 21,654.16, its fourth straight day of losses. The China Enterprises Index of top locally listed mainland Chinese stocks fell 0.05 percent to 12,356.88. Market turnover was flat at HK$84.28 billion ($10.86 billion) from Thursday's HK$84.2 billion.
China Resources Enterprise, which has businesses in food processing and distribution, supermarkets and beer production, fell 3.73 percent to HK$29.65 following a two-year high on Thursday on the back of an improving outlook for consumer stocks. Property developer Sino Land fell 1.77 percent at HK$14.42, while Sun Hung Kai Properties slipped 1.52 percent to HK$109.90.
Some analysts said valuations looked attractive after the extended sell-off. For the week, Hong Kong's benchmark index was down 2.9 percent. Foxconn International rose 6.37 percent to HK$11.02 after Intel, the world's largest chipmaker, announced fourth-quarter revenue and a profit margin outlook that handily beat Wall Street's expectations, helped by better pricing and demand for server chips.
Air China extended recent gains, rising 3.81 percent to HK$6.54, on news that the carrier could handle an increase in passenger traffic this year. Cement maker and distributor TCC International Holdings fell 4.83 percent to HK$3.55 and was among the most actively traded stocks in Hong Kong on news that the company is selling about 256.6 million new shares to raise up to $113 million.
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