Asian shares surrendered early gains on Tuesday, weighed down by Chinese stocks, which slid on reports that Beijing will not relax tougher property measures any time soon.
China’s banking regulator left few doubts that efforts to rein in real estate speculation will remain in place despite media reports of easing restrictions in some cities. That helped to trigger some profit taking in Asian stocks after three days of gains.
"The view that the Chinese will not ease restrictions on property took away from sentiment, and markets had been up for a few days, so there’s a bit of a correction," Lorraine Tan, director of research, Asia for Standard & Poor’s in Singapore, said.
"It was a reminder of risks."
The MSCI ex-Japan share index fell 0.7 per cent by mid-afternoon. The Shanghai composite index fell 1.6 per cent while Hong Kong’s Hang Seng index slipped 0.2 per cent.
Despite concerns that Beijing will maintain its curbs on property speculation, bargain hunters have their eyes peeled for opportunities in Chinese property-related stocks.
A survey of investors by Macquarie Securities showed that while 78 per cent of respondents expected property prices to fall by the end of March 2011, the real estate industry was the top pick of where investors said they would increase exposure in the next six months.
"In addition to being the most cited sector for H2 accumulation, property is even more favoured than in our (bullishly toned) November 2009 survey, when a majority of respondents still expected property prices to continue rising," analysts at the bank said in a report.