Chinese banking shares stabilize while car and mining stocks soar

Shares in Asia recouped some of yesterday's losses as benchmark indexes rose. In China the Shanghai Composite Index climbed 2.1% to end the day at 3,290, and Hong Kong's Hang Seng Index rose 0.8% to 22,612. In Japan the Nikkei Index closed at 9,442 -- up 0.4%.

Chinese mining companies soared today after gold hit a new high of $1,177 per ounce. Shandong Gold Mining surged to its maximum 10% daily limit, Zijin Mining (ZIJMF) climbed 6.5% and Zhongjin Gold gained 5.4%. Other metals companies also moved forward with Baoshan Iron & Steel surging 8.5% and Jiangxi Copper (JIXAY) gaining 3.8%.
Chinese-listed banking shares stabilized today after yesterday's government warning to maintain adequate capital sent a shiver through the sector. Bank of China (BACHF) recovered 0.7% of yesterday's losses, China Construction Bank (CICHF) won back 0.5% and Industrial & Commercial Bank of China (IDCBY) inched up 0.2%.

Investors continued to bet on Chinese car manufacturers as the most populous country in the world promises to provide many new customers, as the nouveau riche trade in their rusty bicycles for automobiles. This year for the first time, China has overtaken the U.S. as the world's biggest car market, according to the BBC. Perhaps the hype surrounding the Guangzhou Auto Show is also boosting investor confidence in the sector. SAIC Motor jumped 2.9% today and DongFeng Automobile (DNFGF) gained 2.1% and Beiqi Foton motor added 1.7%.

In Hong Kong, weak performances by banks such as Bank of China (BACHF), which sank 3%, and Industrial & Commercial Bank of China (IDCBY), which lost 0.7%, were more than neutralized by gains of insurer China Life (LFC), which surged 4.5% and clothing retailer Esprit Holdings (ESHDF), which rose 4%.

It was another strong day for Hong Kong IPOs; Sany Heavy Equipment skyrocketed, adding 46% to its value on its first day of trading while Fantasia Holdings, which develops luxury residences in China, rose 10% during the day, finally settling up 2.3%. Not too impressive considering that luxury developer Evergrande Real Estate Group gained 34% on its debut earlier this month, but in positive territory nonetheless. Today Evergrande shed 3.3%.

In Japan shares in property companies fell sharply, triggered by the bankruptcy of condominium developer and real estate designer Anabuki Construction, which has fallen $1.58 billion in debt, according to Bloomberg. Condominium developer Suncity nosedived 6.3% on fears that the condo market is in decline; the company registered a loss of 5.7 billion yen for the first nine months of the year, reports Bloomberg. A notice on the company's website warns, "For those investors who are looking for exceptionally high yields, they are well advised to change their expectations and learn more about the characteristics of Japanese real estate market."


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