Asian shares fall as China weak­ens cur­rency fur­ther

The China Post - - BUSINESS INDEX & -

Asian shares tum­bled on Wed­nes­day as in­vestors fret­ted over the im­pact which a sec­ond cut in China’s cur­rency in as many days will have on economies closely tied to the Asian gi­ant.

Hong Kong lost 2.38 per­cent, or 582.19 points, to end at 23,916.02, while Shang­hai dropped 1.06 per­cent, or 41.59 points, to 3,886.32 while the Shen­zhen Com­pos­ite In­dex, which tracks stocks on China’s sec­ond ex­change, fell 1.54 per­cent, or 35.09 points, to 2,249.18.

Other re­gional mar­kets also lost ground, with Tokyo clos­ing down 1.58 per­cent, or 327.98 points, at 20,392.77, while Syd­ney ended 1.66 per­cent lower at 5,382.10. Seoul ended 0.56 per­cent, or 11.8 points, lower at 1,975.47.

The sec­ond yuan cut on Wed­nes­day brings the re­duc­tions this week to 3.5 per­cent — the largest in more than two decades — in a move widely seen as de­signed to boost China’s flag­ging econ­omy.

Con­cerns about China’s stalling growth were com­pounded on Wed­nes­day when three key in­di­ca­tors — in­dus­trial pro­duc­tion, re­tail sales and fixed as­set in­vest­ment — all came in be­low mar­ket ex­pec­ta­tions.

China-fo­cused Stocks Fall

Wall Street tum­bled Tues­day on the ini­tial de­val­u­a­tion, with the Dow Jones In­dus­trial Av­er­age, S&P 500 and Nas­daq Com­pos­ite In­dex all clos­ing down around one per­cent or more.

In Tokyo share trad­ing Wed­nes­day, au­tomaker Toy­ota fell 1.66 per­cent to 7,987 yen, while Nissan, also de­pen­dent on China for sales, dropped 2.09 per­cent to 1,168.5 yen.

Air­lines lost ground in Shang­hai on wor­ries that a weaker yuan will raise the cost of ser­vic­ing U.S. dol­lardebt. Air China fell 5.04 per­cent to 10.92 yuan and Hainan Air­lines dipped 3.28 per­cent to 5.30 yuan.

In Hong Kong, de­vel­op­ment stocks also took a hit from debt con­cerns, with with China Re­sources Land drop­ping 7.92 per­cent to HK$19.80 and China Over­seas Land & In­vest­ment giv­ing up 8.51 per­cent to HK$23.10.

Safe- haven gold f etched US$ 1,117.50 com­pared to US$1,110.35 late Tues­day.

In in­di­vid­ual re­sults, Com­mon­wealth Bank of Aus­tralia said ful­lyear net profit rose five per­cent to a record AU$9.063 bil­lion (US$6.62 bil­lion). Shares halted trad­ing ahead of a AU$5 bil­lion cap­i­tal-rais­ing.

The Hong Kong stock ex­change said its first-half earn­ings surged 73 per­cent to a record high as it reaped the ben­e­fits of a link-up with the Shang­hai bourse.

Euro­pean Stocks Slump on China

Euro­pean stock mar­kets slumped on Wed­nes­day, mir­ror­ing the per­for­mance across Asia af­ter China fur­ther de­val­ued its cur­rency and re­ported more poor data.

Shares in min­ers, autos and lux­ury good groups, which rely heav­ily on Chi­nese de­mand, fell sharply for a sec­ond day.

Lon­don’s bench­mark FTSE 100 in­dex dropped one per­cent to stand at 6,597.75 points around mid­day in the cap­i­tal, af­ter the latest Bri­tish un­em­ploy­ment data came in at 5.6 per­cent, un­changed from last month.

Frank­furt’s DAX 30 slid 2.01 per­cent to 11,066.93 points and the CAC-40 in Paris shed 1.97 per­cent to 4,998.65 com­pared with Tues­day’s close. In other mar­kets:

— Mum­bai fell 1.27 per­cent, or 353.83 points, to close at 27,512.26.

In­fosys rose 3.39 per­cent to 1141.75 ru­pees but Vedanta plum­meted 8.03 per­cent to 113.90 ru­pees.

— Sin­ga­pore closed down 2.90 per­cent, or 91.57 points, to 3,061.49.

Agribusi­ness com­pany Wil­mar In­ter­na­tional eased 1.30 per­cent to SG$3.03 while real es­tate devel­oper Cap­i­taland fell 4.69 per­cent to SG$3.05.

— Kuala Lumpur fell 1.64 per­cent, or 26.78 points, to close on 1,609.93.

Sime Darby fell 1.47 per­cent to 8.04 ring­git, Malaysian Bank­ing fell 1.29 per­cent to 8.41 ring­git, and Petronas Gas lost 0.46 per­cent, end­ing at 21.48 ring­git.

— Jakarta ended down 3.10 per­cent, or 143.10 points, at 4,479.49.

Bank Mega gained 7.41 per­cent to 2,900 ru­piah while textile and gar­ment com­pany Sri Re­jeki Is­man fell 13.43 per­cent to 303 ru­piah.

— Welling­ton fell 1.12 per­cent, or 65.14 points, to 5,757.21.

Spark New Zealand was 2.46 per­cent off at NZ$2.77 while Fletcher Build­ing closed 2.05 per­cent down at NZ$7.64.

— Manila lost 0.99 per­cent, or 75.02 points, to 7,495.43.

Top-traded Semi­rara Min­ing and Power rose 1.96 per­cent to 130 pe­sos, but BDO Uni­bank lost 1.92 per­cent to 102 pe­sos and Manila Elec­tric fell 2.09 per­cent to 300 pe­sos.

Bangkok was closed for a public hol­i­day.

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