Stocks fall on signs of tighter brokerage lending
Chinese stocks fluctuated wildly Thursday on signs of a further tightening up on lending practices at brokerages, while other world benchmarks sagged as investors awaited the outcome of Greece’s talks with creditors.
European stocks fell in early trading, with France’s CAC-40 down 2 percent at 4,932.72 and Germany’s DAX falling 1.6 percent to 11,233.17. Britain’s FTSE 100 shed 1.4 percent to 6,855.74. U.S. stocks were poised to open lower, with Dow futures dropping 0.5 percent to 18,003.00 and the broader S&P 500 futures falling 0.5 percent to 2,106.00.
Key creditors are meeting with Greece’s prime minister in Brus- sels this week as part of diplomatic efforts to resolve negotiations over budget reforms it needs to carry out in order to get access to bailout loans. Investors are hoping both sides will be able to come to a deal and avert a financial meltdown for the debt-stricken country.
Hong Kong stocks ended 0.38 percent lower. The benchmark Hang Seng Index slipped 105.58 points to close at 27,551.89 on turnover of HK$195.23 billion (US$25.19 billion).
In Hong Kong, Digital Domain Holdings, a majority stakeholder in a Hollywood visual effects company, sank 14.3 percent to HK$1.08, following a more than 40 percent plunge Wednesday.
In mainland the benchmark Shanghai Composite Index added 0.76 percent, or 37.12 points, to 4,947.10 — the highest since January 2008 — on turnover of 1.1 trillion yuan (US$179.8 billion). The market reversed earlier losses that saw it plunge as much as 5.35 percent.
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, lost 0.58 percent, or 17.71 points, to 3,023.70 on turnover of 933.8 billion yuan.
Chinese shares slumped in early afternoon trading after Golden Sun Securities on Thursday said it would no longer allow shares on the techrich ChiNext index to be used to for margin trading — through which investors borrow money to trade stocks — Bloomberg News said.
Margin trading has been the key force behind an extraordinary surge in mainland stocks, which have risen more than 120 percent in Shanghai in a year.
Banks led the gains in Shanghai. ICBC rose 2.69 percent to 5.34 yuan while China Construction Bank jumped 4.06 percent to 6.92 yuan.
Electronics companies fell in Shenzhen. Sino Wealth Electronic tumbled 8.12 percent to 30.99 yuan while Guangdong Ellington Electronics Technology fell 7.09 percent to 38.63 yuan.
Sydney tumbled 1.42 percent, or 79.30 points, to 5,504.30 for a fourth straight loss.
Tokyo was marginally higher, adding 14.68 points to 20,488.19 and Seoul edged up 0.47 percent, or 9.70 points, to 2,072.86.
In Japanese currency trade Thursday the dollar was at 124.33 yen compared with 124.23 yen in New York, and well up from 123.90 yen in Tokyo earlier Wednesday.
Gold fetched US$ 1,183.30 compared with US$1,189.20 late Wednesday. In other markets: — Wellington rose 0.11 percent, or 6.74 points, to 5,865.44.
Contact Energy was up 0.33 percent at NZ$6.08 and Spark fell 1.21 percent to NZ$2.855.
— Manila closed 0.11 percent, or 8.02 points, lower at 7,553.65.
Ayala Corp was down 1.16 percent at 767 pesos and Ayala Land fell 0.64 percent to 39.10 pesos but Manila Electric jumped 2.57 percent to 287 pesos.
— Bangkok closed up 0.60 percent, or 8.83 points, to 1,490.90.
Kasikorn Bank rose 2.05 percent to 199.00 baht, while oil company PTT fell 0.88 percent to 337.00 baht.
— Jakarta ended down 0.68 percent, or 34.68 points, at 5,095.82.
Indonesia-based oil palm company Dharma Satya Nusantara gained 2.44 percent to 4,200 rupiah, while Indonesia-based coal miner Indo Tambangraya Megah fell 4.11 percent to 12,825 rupiah.
— Kuala Lumpur closed down 0.44 percent or 7.69 points, at 1,741.48.
Hong Leong Financial Group rose 1.79 percent to 15.90 ringgit, and Kuala Lumpur Kepong gained 1.43 percent to 22.70 ringgit, but IOI Corp. lost 2.44 percent to end at 4.00 ringgit.
— Singapore fell 0.14 percent, or 4.84 points, to 3,345.00.
Oversea-Chinese Banking Corporation fell 0.40 percent to SG$10.00 while Singapore Airlines declined 1.46 percent to SG$10.84.
— Mumbai fell very marginally by 0.09 percent, or 23.78 points, to end at 26,813.42.
Tata Steel fell 2.58 percent to 308.25 rupees, while Reliance Industries rose 1.85 percent to 912.50 rupees.