On Wednesday, China’s stock market saw a mixed performance amidst efforts to prevent a significant bankruptcy within the real estate sector.
In Hong Kong, stocks edged up by 0.2%, reaching 17,129.37, extending their gains for the fourth consecutive day. The Hang Seng Tech Index also advanced by 0.7%, with JD.com witnessing a 0.6% increase following the company’s announcement of a share buyback plan amounting to as much as 3 billion dollars over the next three years. However, the Shanghai Composite Index experienced a decline of 0.5%, closing at 3,040.04, while the smaller market in Shenzhen also dropped by 0.5%.
Reports from China’s local media on Tuesday indicated that state-owned banks in the country might raise up to 80 billion yuan ($11.2 billion) in syndicated loans to assist the property developer China Vanke in meeting its impending repayment deadlines. Vanke, the second-largest developer in the nation based on market value, has faced financial challenges similar to those of Evergrande and Country Garden, both of which have already defaulted on their debts. In January, a Hong Kong court ordered Evergrande to undergo liquidation following a failed attempt to restructure its $300 billion debt owed to banks and bondholders. Moody’s downgraded Vanke’s credit rating to “junk” status on Monday.
Despite the news of potential financial support, Vanke’s stocks experienced a 2.2% pullback on Wednesday after surging earlier. On Tuesday, its shares listed in Hong Kong closed 10.3% higher, while the stock traded in Shenzhen ended the day with a 5.7% increase.
In the realm of metal trading, the People’s Bank of China continued to demonstrate robust gold-buying activities amid escalating global geopolitical tensions and increased demand for safe-haven assets, thereby contributing to a further surge in the price of gold. According to official data, China’s gold reserves witnessed their 16th consecutive monthly increase, with reserves reaching 72.58 million ounces by the end of February, marking a month-on-month rise of 390,000 ounces.
However, gold experienced a retreat on Wednesday after reaching a new record high on Monday, driven by investor interest in purchasing stocks of gold producers and jewelers, consequently bolstering stock prices in the sector.
Chow Tai Fook Jewellery Group recorded a 0.9% increase on Wednesday, building upon the previous week’s surge of 4.6%, which propelled the stock to all-time highs. Similarly, Zijin Mining Group, China’s largest gold producer by market value, saw a rise of 0.4% in Shanghai and 0.6% in Hong Kong.
In other market news, Chinese smartphone manufacturer Xiaomi witnessed a 0.4% increase following its announcement on Tuesday regarding the impending launch of its first electric vehicle scheduled for March 28.