Chinese indexes made their best weekly gains in two months with the Hang Seng up 6.3 percent and Shanghai Composite up 5.7 percent since Monday; both driven by the promise of liquidity from Beijing's commitment to a loose monetary policy.
It seems inevitable that the Shanghai market is forming a bubble, but the government is unlikely to reign in liquidity before national day on October 1st - this year the politically sensitive 60th anniversary of the founding of the People's Republic of China.
The Hang Seng Index closed up 0.8 percent today despite falls earlier in the day, mainly from real estate stocks. The China Enterprises Index, which represents Hong Kong listed Chinese H-shares, rose 1.4 percent.
The Hang seng Property Index lost 0.7 percent. Sun Hung Kai Properties (HK:0016) fell 1.7 percent. Swire Pacific (HK:0019) dropped 3 percent. Property dropped.
On the mainland, listed developers also declined by an average of 1.5 percent. China Vanke (SH:000002) fell 1.39 percent, Poly Real Estate Group (SH:600048) dropped 2 percent. Shunfa Hengye (SH:000631) dropped 4.9 percent.
Aluminium shares surged forward today, with several plays all hitting the 10 percent trading cap, including Chinalso (SH:601600), Shanxi Guanlu (SH:000831), Shandong Nanshan (SH:600219), Yunnan Aluminium (SH:000807) and Henan Zhongfu Industry (SH:600595)
Energy and resources stocks boosted the Shanghai Composite Index as much as 1.5 percent, taking aggregate gains for stocks in the sector to 85 percent so far this year. The Shanghai Securities News reported that China's power output in mid-July via major grids was up 7.9 percent year-on-year.
China Shenhua Energy (SH:601088, HK:1088) rose 4.2 percent on Hong Kong, and 6.2 percent on Shanghai after announcing its US$331bn coal project in Indonesia has initiated construction.