Asia Markets

Evergrande shares in Hong Kong plunge in mixed trading day for Asia-Pacific markets

Key Points
  • By the Friday market close in Hong Kong, shares of China Evergrande Group listed in the city fell 9.46%. The move came following reports that the property developer is seeking government support to approve a restructuring plan, warning of an impending cash crunch.
  • Shares of Australia's "Big Four" banks soared on Friday after authorities announced changes to simplify credit access for consumers and small businesses.

SINGAPORE — Hong Kong-listed shares of China Evergrande Group plunged in a mixed trading day for Asia-Pacific markets on Friday.

By the Friday market close in Hong Kong, shares of China Evergrande Group listed in the city fell 9.46%. The move came after reports the property developer is seeking government support to approve a restructuring plan and warned of an impending cash crunch. 

For its part, Evergrande said in a Thursday release: "There are rumors circulating on the Internet about the reorganisation of Hengda Real Estate. The relevant documents and pictures are fabricated and are pure defamation, causing serious damage to the Company's reputation. The Company strongly condemns such acts and has reported the case to the public security authorities."

Hong Kong's Hang Seng index was down 0.32% to close at 23,235.42. Mainland Chinese stocks were also lower on the day, with the Shanghai composite down 0.12% to about 3,219.42 while the Shenzhen component was below the flatline at around 12,814.17.

Major Australia bank stocks surge

Meanwhile, stocks of major Australian banks jumped on Friday.

Shares of the "Big Four" banks helped lift the broader S&P/ASX 200 index higher by 1.51% on the day to 5,964.90. Australia and New Zealand Banking Group surged 6.28%, Commonwealth Bank of Australia jumped 3.01%, Westpac soared 7.39% and National Australia Bank rose 6.86%. 

The moves came after authorities announced changes to simplify credit access for consumers and small businesses.

"Our current regulatory framework with respect to lending is not fit for purpose," Australian Treasurer, Josh Frydenburg, told reporters. "It's become overly prescriptive, it's become increasingly costly, it's become increasingly complex and responsible lending has become restrictive lending."

"We need our banks to be extending credit, we need the regulation to be streamlined, we need customers to be able to access credit," Frydenburg said.

In Japan, the Nikkei 225 rose 0.51% to close at 23,204.62 while the Topix index added 0.48% to end its trading day at 1,634.23. South Korea's Kospi also advanced 0.27% to 2,278.79.

Overall, the MSCI Asia ex-Japan index edged 0.48% higher.

Onshore Chinese yuan strengthens

Investors monitored Chinese assets after FTSE Russell announced Thursday that Chinese government bonds are scheduled to be included in the FTSE World Government Bond Index starting October 2021.

Following the announcement, the onshore Chinese yuan strengthened to 6.8193 per dollar, but was still off levels below 6.78 against the greenback seen earlier this week. The offshore Chinese yuan was at 6.8263 per dollar, also weaker than levels below 6.8 seen earlier in the trading week.

"I think even before the inclusion or the announcement of the inclusion, we are optimistic on Chinese bonds," Tai Hui, Asia chief market strategist at JPMorgan Asset Management, told CNBC's "Squawk Box Asia" on Friday.

"We are in a zero-yield world and you know, Chinese bonds do offer somewhere between 2.5% to 3% when it comes to government bonds," he said. "From that perspective, especially given the fact that we've seen the (Chinese yuan) on a stronger footing in the past few months, it does offer a pretty attractive proposition."

Overnight on Wall Street, stocks eked out small gains. The Dow Jones Industrial Average closed 52.31 points higher, or 0.2%, at 26,815.44. The S&P 500 added 0.3% to finish its trading day at 3,246.59 while the Nasdaq Composite advanced 0.4% to close at 10,672.27. The moves stateside came in a wild session that saw the Dow down more than 200 points at its session low and up more than 300 points at one point.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 94.32 after rising from levels below 93 this week.

The Japanese yen traded at 105.41 per dollar, having weakened from levels below 104.4 against the greenback this week. The Australian dollar changed hands at $0.7071, following this week's slip from levels above $0.72.

Oil prices rose in the afternoon of Asian trading hours, with international benchmark Brent crude futures up 0.55% to $42.17 per barrel. U.S. crude futures added 0.4% to $40.47 per barrel.

Correction: This article was updated to accurately reflect the movements of the Topix index in Japan.