(Yicai) Dec. 10 -- Chinese property stocks surged after a meeting of China’s top leadership pledged to stabilize the country’s real estate market.

Several developers hit their upper daily trading limit, including Hua Yuan Property [SHA: 600743], which rose 10 percent to close at CNY2.37 (33 US cents) a share in Shanghai today, and Deluxe Family [SHA: 600503], which ended at CNY3.49.

The meeting of the Political Bureau of the Communist Party of China Central Committee called for "stabilizing the property and stock markets,” Xinhua News Agency reported yesterday after mainland stock exchanges had closed. The top decision-making body expanded on previous statements about "promoting stabilization in the real estate market.”

The pledge suggests that policy efforts will continue to focus on improving the supply and demand relationship as well as addressing the liquidity issues faced by real estate developers and local governments, analysts at China Merchants Securities said in a report.

Property stocks in Hong Kong, whose trading hours are later than the Chinese mainland, retreated after gaining on the news yesterday. Sunac China Holdings [HKG: 1918] sank 10 percent to HKD2.61 (34 US cents), following the previous day’s 14.7 percent surge. R&F Properties [HKG: 2777] slid 7.3 percent to HKD1.66, after soaring 10.5 percent yesterday.

The Politburo also shifted the country’s monetary policy stance from “prudent” to “moderately loose” for the first time in 14 years and vowed a “more proactive” fiscal policy, Xinhua reported, citing a readout from the meeting.

The shift in stance exceeded market expectations, creating further room for mortgage rates to fall and potentially driving the stabilization and rebound of housing demand, China Merchants said.

Zhang Jun, chief economist of Galaxy Securities, noted that the property and stock markets are reservoirs of household wealth and are key to stabilizing expectations and stimulating the economy. As external uncertainties grow next year, preventing systemic risks from potential real estate or stock market slumps is crucial, Zhang added.

Editor: Emmi Laine