Asia Shares Mixed; Muted Reaction to Turkey Coup Attempt, China Data Disappoints

Stocks in Asia were mixed on Monday, in a largely muted reaction to a failed coup against the Turkish government, while data out of China showed slowing home price gains. Australia’s S&P ASX 200 was up 0.5% and the Hang Seng Index was up 0.2%. But the Shanghai Composite Index fell 0.1% and South Korea’s Kospi was flat.

For the most part investors were still focused on China, where data last week showed the country maintaining its growth pace of 6.7% in the second quarter. On Monday, data showed housing prices in the country rising at a slower pace in June from a month earlier.

Chinese home prices increased 0.7% from a month earlier, compared with gains of 0.8% and 1.0% recorded in May and April, respectively. Chinese stocks were slipping, on concerns the better growth data decreases the likelihood of the central bank announcing easing measures. “The PBOC [People’s Bank of China] will likely micromanage short term liquidity in the system” instead of introducing broad interest rate cuts given the current data, said Gavin Parry, managing director of Hong Kong-based brokerage Parry International Ltd.

Shares of China Vanke Co., the country’s biggest home builder, fell 2% in Shanghai, while Poly Real Estate Group Co. Ltd fell 0.2%. Sectors that enjoyed a rally last week, such as steel and coal, also gave up some of their gains as profit taking set in. In Hong Kong, a gauge of property stocks on the Hang Seng Index was up 0.3%, ahead of most other sectors. But there were losses in individual names, including Longfor Properties Co., which fell 3.7%, and China Resources Land, which slipped 1.1%. Meanwhile, the Australian market was getting a lift on expectations that decent growth in China will lead to increased demand for base metals from the country.

Even so, market sentiment on Monday was “a bit treading water with Japan offline and Europe coming up,” said Mr. Parry. Markets in Japan are closed for a holiday, after the Nikkei’s 9.2% jump last week. Later in the Asia day, European markets will react for the first time to news of an foiled military coup against President Recep Tayyip Erdogan. On Saturday, Turkey’s government reasserted its control and carried out mass arrests. The stock market reaction to the coup has been muted although in Malaysia, shares of IHH Healthcare declined 1.1%, underperforming the broader benchmark’s 0.1% loss. IHH is Asia’s largest private hospitals operator with operations in Turkey, which it counts as one of its key markets.

Write to Chao Deng at [email protected]
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