Greater China markets unable to hold to early gains
Chinese markets trimmed off early gains following the release of the October home-price index and ended in negative territory after Beijing moved to once again intervene in the market.
Investors did not react positively to the People's Bank of China's latest round of market intervention. Offshore yuan clearing banks and related offshore participant banks are no longer able to trade in bond repos and account finance, said Reuters, citing people close to the matter. Restriction of capital outflows would keep the exchange rate stable as China awaits the International Monetary Fund's decision on the yuan's inclusion to the reserve currency basket.
Despite the move, the yuan fell against the strong dollar at the close of Wednesday's trading session, hovering at 6.3840.
The Shanghai composite fell by close to one percent while the smaller Shenzhen composite saw even bigger losses, ending near a 2 percent decline. The Chinext composite and the CSI 300 index also registered substantial declines at market close.
Chinese banks, however, ended in positive territory with the likes of ICBC, Agriculture Bank of China, Bank of China, CCB, and BoCom all seeing games between 0.2 to 0.6 percent.
Home prices in China rose in 27 out of 70 cities for October, with Shenzhen and Shanghai seeing the biggest percent change year-on-year. Beijing saw a modest 6.5 percent increment in home prices. Nationally, the prices rose 0.1 percent on-year, after falling 0.9 percent on-year in September, according to Reuters calculations based on the official data.
October's home prices consolidated six consecutive months of increments as China's property market slowly bounces back.
Erwin Sanft, head of China strategy at Macquarie told CNBC's "Asia Squawk Box" that while the bounce in home prices was good news for the economy. "Home prices in China are in a very nice upward trajectory," he said. "I would say the nationwide statistics don't show the extent to which home prices have rebounded in Tier 1 and Tier 2 cities."
Sanft added that in the previous week, an entire property development in Shenzhen was sold out in six hours. "It set a record in terms of single day transaction value," he said.
The home price data gave major Chinese property stocks a boost. Real estate developer Vanke was up by 4.8 percent while Gemdale was saw a 4 percent uptick. State-owned Poly Real Estate also gained 6 percent while Shanghai Shimao was up 3.5 percent.
China Citic Bank was the biggest gainer on the Shanghai composite, as its shares soared over 9 percent. Shares of its parent company Citic was also up significantly. This follows yesterday's announcement that its chairman, Wang Dongming, proposed he will not be standing for re-election to the board. while Haitong Securities saw a 3.57 percent uptick.
Away from the mainland, Hong Kong's Hang Seng index was down nearly 0.3 percent in afternoon trading.
Commodity trader and miner Glencore was down 4 percent lower on the back of falling copper prices. The Swiss-based trader has pledged to cut its net debt by $10 billion by end of 2016 and reduce its copper output to lift prices, according to reports. The London Metal Exchange benchmark copper was down to $4,590 a tonne on Tuesday, hitting its lowest in over six years on fears of slowing global demand.