Top-ranking policymaking bodies including the Politburo, the State Council, the central bank and the Central Financial and Economic Affairs Commission have all held meetings in the last two weeks.
China should fine-tune monetary policy in a pre-emptive way based on economic growth and price changes, according to a top-level meeting reports chaired by President Xi Jinping. Monetary policy needs to be neither too tight, nor too loose and should be fine-tuned in a timely and pre-emptive way based on economic growth and changes in price situations, the Central Financial and Economic Affairs Commission said. The meeting pointed out that it is necessary to strengthen regulation of countercyclical macro policy and strive to put tax cuts and fee reduction in place as soon as possible.
Meeting of the Politburo was interpreted by traders as meaning the economy is on a stable enough footing that extended support isn't needed. People have come to a clear consensus that there won't be any aggressive stimulus that floods the economy with excessive liquidity. The China central bank last week gave a signal that supply of cash would be less liberal, when it rolled over only half of the funds coming due through one of its longer-term policy tools, instead offering more seven-day money.
Shares of materials companies declined, with copper-exposed stocks on weak copper prices after weak US property market data and a top party decision-making meeting in China last Friday that appeared to suggest Beijing's focus has been shifted back to structural de-leveraging and prevention of property speculation. MMG (1208 HK), the overseas mining unit of state-owned metals trading giant China Minmetals and a major copper producer, sank 9.6% to HK$3.5, while Jiangxi Copper (358 HK), China's largest smelter of the metal, slid 3.2% to HK$10.84.
HK-listed properties stocks closed down after Chinese government's anti-speculation commentary. China Overseas Land and Investment (688 HK) dropped 2%, to HK$28.15, and Country Garden Holdings (2007 HK) lost 3% to HK$12.54. Sunac China (01918) plunged 4.9% to HK$39.7. Shimao Property (00813) sank 4.3% to HK$23.2. China Vanke (02202) 4.3% to HK$30.9. Agile Group (03383) fell 4% to HK$11.98.
Airline stocks declined on US decision to stop waiving sanctions on buyers of Iran oil. Aviation oil is the largest operating cost for airlines. Crude oil prices jumped more than 2% on Monday on growing concern about tight global supplies after the United States announced a further clampdown on Iranian oil exports. Washington said it would eliminate in May all waivers allowing eight economies to buy Iranian oil without facing US sanctions. China Southern Airlines (1055), the country's largest carrier by fleet, fell 7.4% to HK$6.86. Air China (753), the country's flag carrier, fell 7% to HK$9.33.
Shares of China Molybdenum (3993 HK), the nation's largest producer of the steel-smelting ingredient, plunged 6.3% at HK$3.15, after estimated its net profit dropped 77.4 to 83.9% year-on-year in the three months to March 31, to between 250 million yuan and 350 million yuan..
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