China stocks opened sharply lower on Monday but managed to erase much of the losses by midday, with real estate shares reversing initial declines on data showing continuous recovery in the property sector.
Hong Kong shares dropped, with investors’ risk appetites soured by resumed declines in oil prices as well as Friday’s tumbles for equities prices in US and European markets.
China’s blue-chip CSI300 index opened the session 1.6 per cent weaker, but by lunch break, the index stood 0.2 per cent higher at 3,125 points. The Shanghai Composite Index was down 1.8 per cent at the open, but was flat the end of morning.
Mainland investors, who had feared further yuan depreciation, took some comfort as the Chinese currency firmed on Monday after the central bank confirmed a move on reserve ratios for some banks that traders say should reduce offshore speculation in the currency.
Property shares recovered from initial losses and climbed 0.4 per cent, after data showed China’s home prices continued to rise in December 2015, adding to signs of improving in the housing market.
In Hong Kong, the Hang Seng index was down 1.1 per cent at 19,304.76 points, while the Hong Kong China Enterprises Index fell 0.6 per cent to 8,189.27.