SHANGHAI, March 27 (Reuters) - China’s central government issued notices on Friday urging local authorities to restrict land supply and support their residents’ need for better housing conditions, sending the stock market higher after a week of volatile trade.
News of the housing support measures, first reported early Friday by state media, sent China’s CSI300 real estate index higher by 3.9 percent. The news buoyed the broader market, as did Beijing’s move earlier this week to relax foreign investment rules.
In a document issued on its website, the central Ministry of Land and Resources urged local governments to support residents who need to improve their housing conditions, and reduce or even suspend land supply in cities where there was a surplus of housing.
The ministry also pushed provincial governments to step up their oversight of local housing markets to ensure “scientific” planning and prevent “chaotic”, runaway development.
The impact of poor economic data released on Friday - showing profits earned by Chinese industrial firms fell 4.2 percent in January-February - was offset by expectations of fresh money inflows after China waived the $1-billion limit on foreign fund investment under the Qualified Foreign Institutional Investor (QFII) scheme.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 0.6 percent, to 3,971.70, while the Shanghai Composite Index gained 0.3 percent, to 3,691.10. On the week, both indexes were up about 2 percent.
Among the most active stocks in Shanghai were China Shipbuilding, down 2.0 percent at 10.23 yuan; China State Construction, up 3.0 percent at 7.22 yuan and Agricultural Bank Of China, down 0.3 percent at 3.64 yuan.
In Shenzhen, BOE Technology, up 0.8 percent at 4.04 yuan; Vanke, up 3.1 percent at 13.35 yuan and TCL Corp, up 0.5 percent at 5.86 yuan were among the most actively traded.
Total volume of A shares traded in Shanghai was 40.7 billion shares, while Shenzhen volume was 23.6 billion shares. (Reporting by Samuel Shen and Pete Sweeney; Additional reporting by Gerry Shih; Editing by Alan Raybould and Subhranshu Sahu)