China blue-chips fall as property policy easing hopes fade

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SHANGHAI, Nov 12 (Businesshala) – Chinese blue-chip stocks closed lower on Friday as stocks of real estate developers retreated from the buying frenzy in the previous session by betting on policy easing in the property sector.

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The blue-chip CSI300 index fell 0.2% to 4,888.37, while the Shanghai Composite Index gained 0.2% to 3,539.10.

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** For the week, the Shanghai Composite Index gained 1.4%, its biggest weekly gain in two months. The CSI300 index rose 1 per cent, the highest in five weeks.

** Real-estate firms fell 2.3% a day after posting their best session in nearly seven years on a slew of positive signs for policy easing in the sector.

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** Bankers and analysts, however, said China will stick to policies to curb over-borrowing by property developers, even as it tries to help home buyers and “appropriate” measures amid the industry’s liquidity crisis. Makes changes to financing to meet demand.

** There is little evidence that rules preventing debt creation in the sector will be withdrawn.

** “We do not expect systemic risk from the asset market, although it may remain a near-term concern ahead of the December/January offshore bond redemption season,” Morgan Stanley said in a note.

** High-end equipment manufacturers and defense stocks rose 2.9% and 3.8%, respectively.

** Citi Securities said in a note that a boom in the defense sector could be the “new normal”.

Reporting by Shanghai Newsroom; Ramakrishnan M.

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