Asian shares fall on China wor­ries

The Pak Banker - - INTERNATIONAL BUSINESS/SPORTS -

Asian shares fell on Tues­day, with Shang­hai hit by fears a pick-up in the prop­erty mar­ket will stymie gov­ern­ment stim­u­lus while a deadly blast in Bangkok sent Thai shares plung­ing.

The dol­lar headed higher against the euro, helped by im­prov­ing con­fi­dence in the US hous­ing sec­tor ahead of the re­lease of US cen­tral bank min­utes.

Tokyo closed down 0.32 per­cent, or 65.79 points, at 20,554.47. Syd­ney fell 1.20 per­cent, or 64.55 points, to 5,303.10 and Seoul dipped 0.62 per­cent, or 12.26 points, to close at 1,956.26. Shang­hai slumped 5.09 per­cent in af­ter­noon trade while Hong Kong shares dropped 0.63 per­cent. Thai shares notched their steep­est de­cline this year and the baht slid to its low­est level since 2009 af­ter a bomb at­tack killed at least 20 peo­ple and in­jured scores in Bangkok.

Asian shares mostly rose in early trade, bol­stered by gains on Wall Street and news that US home­builder sen­ti­ment hit its high­est level since the re­ces­sion ended in 2009. But news that new-home prices rose in 31 out of 70 Chi­nese cities in July, up from 27 the pre­vi­ous month, knocked shares as in­vestors wor­ried it meant Bei­jing will not un­leash new stim­u­lus to prop up sag­ging growth. "The eas­ing that we've been ex­pect­ing and has been push­ing up the eq­uity mar­ket a cou­ple of months back is now dwin­dling away be­cause the prop­erty mar­ket is do­ing much bet­ter," said Er­win Sanft, the Hong Kong-based head of China strat­egy at Mac­quarie. "For the stock mar­ket, it's not great news," he told Bloomberg News.

The mixed data added to re­gional jit­ters about growth in China -- Asia's largest econ­omy and a key driver of global growth -- which reached fever pitch last week af­ter a shock de­val­u­a­tion of the yuan. Last week's steep fall scared many in­vestors into drop­ping Chi­nese as­sets and last week Shang­hai and Hong Kong shares saw $531 mil­lion net out­flows -the ninth week of sales out of 10.

Even a pledge Fri­day by China's se­cu­ri­ties reg­u­la­tor to keep sup­port­ing eq­ui­ties, ex­tend­ing mea­sures un­leashed dur­ing a mar­ket crash in June, has not re­as­sured deal­ers. Traders are selling now the mar­ket has bro­ken the key 4,000-point level and that is un­likely to change "un­less there are some cat­a­lysts such as fur­ther gov­ern­ment sup­port for eq­ui­ties," said Huaxi Se­cu­ri­ties an­a­lyst Wei Wei.

Mar­kets are now await­ing the re­lease of min­utes from the Fed­eral Re­serve on Wed­nes­day, which could shed light on the US cen­tral bank's tim­ing for an in­ter­est rate rise. Spec­u­la­tion the Fed will soon raise its key rate for the first time in al­most a decade has strength­ened the dol­lar, while con­cerns the fall in the yuan could spark a cur­rency war has dragged on many Asia-Pa­cific cur­ren­cies.

In Tokyo cur­rency mar­kets, the dol­lar was quoted at 12.45 yen, slightly up from 124.41 yen in New York late Mon­day. The euro traded at $1.1062 and 137.66 yen from $1.1078 and 137.81 yen. The Thai baht fell to 35.648 against the dol­lar, touch­ing its low­est point since April 2009 on fears a deadly bomb­ing in the cap­i­tal could hit the vi­tal tourism sec­tor. Bangkok shares slumped as much as 2.8 per­cent in open­ing deals, their steep­est de­cline since De­cem­ber, be­fore par­ing losses to a fall of 1.99 per­cent by early af­ter­noon.

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