HONG KONG- Asian shares edged higher on Monday ahead of a week packed with major quarterly earnings announcements though news of trials of a property tax in China weighed on Hong Kong and mainland Chinese markets.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.26 percent while Japan’s Nikkei lost 1 percent on softer earnings by several local companies.
Australian shares rose 0.47 percent, supported by miners, while South Korea was up 0.5 percent, though these gains were balanced by more muted moves in Greater China.
Chinese blue chips were flat, though an real estate index shed 3 percent, while the Hong Kong benchmark gained 0.18 percent despite a 2.6 percent fall in an index of Hong Kong listed mainland property firms.
The property stock declines followed a Saturday announcement by China’s parliament’s top decision-making body that will roll out a pilot real estate tax in some regions.
Embattled developer China Evergrande Group last week appeared to avert a costly default with a last-minute bond coupon payment, and Reuters reported Monday that some bond holders had received payment.
“Although we had some news on the Evergrande front, I think we will see more pressure on the property sector, especially the smaller guys,” said Carlos Casanova Asia economist at UBP pointing to authorities’ efforts to ensure a correction in house prices, and the expansion of plans for a pilot property tax at a time when many property companies had bonds maturing in the coming months.
Also on investors’ minds is a string of company earnings due this week. HSBC and Facebook will both publish quarterly results on Monday, in Asian trading and late US hours
respectively.
Later in the week will be the turn of other benchmark heavyweights including tech giants Microsoft, Apple and Alphabet, and European and Asian financial behemoths from Deutsche Bank and Lloyds to China Construction Bank and Nomura.
“This week earnings take center stage,” said Chris Weston, head of research at brokerage Pepperstone in Melbourne, in a morning note.
