China's central bank has made a New Year's resolution to stabilize prices in the People's Republic. This comes on the heels of yet another interest rate hike that hit on Christmas day. According to China Daily, officials attended a meeting where they discussed pumping funds into agricultural programs and smaller businesses, and focusing on implementing a prudent monetary policy in order to tackle raging inflation. In November, China's consumer price index shot up to a record high of 5.1%, while new loans hit $1.1 trillion.
In Hong Kong, property shares tumbled. Those banking on sales in China were especially hard hit. China Overseas Land & Investment sank 2.4%, and China Resource Land slumped 1.7%. Sino Land plunged 3% -- it boasts a portfolio of properties scattered from Chengdu to Shanghai to Kowloon. Its developments of residential and commercial towers sport names like Island Resort, Greenfields and Honeylake.
Big Energy Companies Slipped
Hong Kong developers also slid lower with New World Development plunging 2.7%, Hang Lung diving 2.5%, Henderson Land dropping 1.6 and Cheung Kong falling 1.4%.
Other big movers included PetroChina, which is reported to be selling its stake in a gas pipeline operator. Hong Kong-listed Kunlun Energy, which produces crude oil and natural gas in China, will buy PetroChina's interest for $2.9 billion, according to Bloomberg, in the hopes that it will benefit from rising demand for gas in Beijing, which is expected to consume 17% more energy in the coming year. Kunlun Energy ended the day down 3.4%, and PetroChina slumped 1.6%.
Other energy producers also dipped with Cnooc falling 0.9%, coal-based energy producer China Shenhua losing 2% and Sinopec declining 2%.
In Shanghai, the market mirrored Hong Kong's movements. Coal producers headed south with China Coal Energy plummeting 3.4% and Yanzhou Coal Mining dropping 3%.
There were also big falls in shares of Chinese developers with Poly Real Estate nosediving 6.2%, Gemdale slumping 5.4% and China Vanke plunging 4.8%. Among other troubles hitting the red-hot Chinese property market, officials are now reviewing new policies restricting foreign investment in Chinese real estate, including requiring buyers to own land for longer time periods before selling it and taking profits. This just might throw a wrench into the plans of many Hong Kong bankers who scoop up luxury flats in smoggy Beijing and flip them for a profit.
Japan Worries About Continued Strength of Yen
In Japan, the finance minister is making some resolutions of his own for the new year, warning that the country must take action against the rise of the yen. Exports are crucial to Japan's financial recovery, and current exchange rates aren't helping. "Companies won't be comfortable about increasing wages and employment until their concern about the currency decreases," an economist at Itochu Corp. told Bloomberg.
Car exporters fared no better with Nissan declining 1.3%, Honda losing 1.1% and Mazda dipping 0.4%.
But it wasn't all bad news. Banks made up Japan's best-performing sector with Mizuho racking up a 1.3% gain and Mitsubishi UFJ and Sumitomo Mitsui Financial both adding 0.5%.