11.07.201402:18:02UTC+00Chinese stocks increase on property restriction ease

Chinese stocks increased as its benchmark index rebounded from the week’s general loss due to belief that there will be easing on property restrictions by the local government with the purpose of countering the slowing growth of Asia’s largest economy.

The Shanghai Composite Index gained 0.4% to 2,045.40, 11:30 am, Shanghai time. Bank of America Corp. and Bocom International Holdings Co.’s strategists say that the dropping prices of property will remain a risk for the economic growth despite the release of recent reports that shows a positive output for the manufacturing data that hinted at a stabilizing Chinese economy.

China’s largest developers Poly Real Estate Group Co. and China Vanke Co. boosted the index by gaining at least 2.2% following reports made by the Xinhua News agency that indicated that Jinan had gotten rid of home purchase limits. For the automakers’ sector, Anhui Jianghuai Automobile Co. soared as it reported that it will be buying the assets of its parent company.

Chief China strategist at Bocom, Hao Hong commented that easing the property purchasing restrictions, reintroducing mortgage discounts, and further monetary loosening are like to occur due to the property sector’s importance to the economy and its multiplier effects. Hong adds that “No one is willing to be held responsible for an ugly crash of the bubble. This is one certainty amongst the many uncertainties that the market is facing.”