China shares slump 6% leading losses across Asia
Asian shares fell on Tuesday, with Shanghai leading the declines as investors doubted Beijing’s commitment to prop up shares while Bangkok slumped after a bomb attack in the Thai capital.
Shanghai closed down 6.15 percent, or 245.51 points, at 3,748.16 — its biggest daily fall in three weeks — while Hong Kong lost 1.43 percent, or 339.68 points, to end the day at 23,474.97.
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.
Thai shares, meanwhile, notched their steepest decline this year of 2.56 percent and the baht slid to its lowest level since 2009 after a bomb attack killed at least 20 people and injured scores.
Asian shares gave up early gains driven by a higher close on Wall Street as jitters about the health of China’s economy spread across the region.
Markets have long been on edge about slowing growth in China, but concerns reached fever pitch last week after a shock devaluation of the yuan sparked fears it is stalling more than previously though.
The steep fall in the yuan scared many investors into dropping Chinese assets and last week Shanghai and Hong Kong shares saw US$531 million net outflows — the ninth week of sales out of 10.
Mainland China’s central bank on Tuesday said it pumped 120 billion yuan into the money market, which state media said was the largest single-day cash injection since January 2014.
Even a pledge Friday by the securities regulator, to keep supporting equities through the statebacked China Securities Finance Corp. for years to come, has not reassured some dealers.
“Investors ran for the exit when the government failed to step in to support the market,” Steve Wang, chief China economist at Reorient Financial Markets, told Bloomberg News.
“The CSF has become a main player in this market so everyone is watching it. People panic when it stops buying.”
Bangkok shares slumped 2.56 percent, the most in eight months, led by a slump in tourism stocks. Transport-related companies were also hit.
Gold was at US$1,119.83 compared to US$1,121.23 late Monday.
European Stocks Drop after
European stock markets fell on Tuesday after another plunge on China’s main index, and on the eve of a German vote on Greece’s new bailout.
London’s benchmark FTSE 100 index dropped 0.62 percent to stand at 6,509.79 points around midday in the capital.
Frankfurt’s DAX 30 edged down 0.07 percent to 10,932.25 points and the CAC-40 in Paris shed 0.25 percent to 4,972.37 compared with Monday’s close.
Athens’ main index slid 1.43 percent to 671.21 points.
In Europe, official data showed that Britain’s annual inflation rate rose to 0.1 percent in July.
Markets are scrutinizing inflation data — which has been kept low of late by falling energy and food prices — for indications of when the Bank of England may start raising its key interest rate from the current record-low level of 0.50 percent. In other markets: — Wellington fell 0.29 percent, or 16.66 points, to 5,710.76.
Fletcher Building was 1.81 percent off at NZ$7.58 while Contact Energy rose 0.76 percent to NZ$5.28
— Manila ended flat, losing 3.39 points to 7,333.45.
Top- traded Universal Robina rose 1.06 percent to 190 pesos, SM Prime Holdings was flat at 20 pesos, while GT Capital dropped 1.22 percent to 1,294 pesos.
— Mumbai eased 46.73 points, or 0.17 percent, to 27,831.54.
Engineering firm Tata Elxsi gained 19.71 percent to 2132.10 rupees, while Indian Bank slid 4.89 percent to 153.70.
— Kuala Lumpur rose 7.06 points or 0.45 percent to 1,579.60.
Maybank added 2.93 percent to 8.43 ringgit and Tenaga Nasional gained 0.58 percent to 10.46, while Public Bank lost 0.11 percent to 17.96 ringgit.
— Singapore fell 0.58 percent, or 17.70 points, to 3,049.65.
City Developments eased 0.56 percent to SG$8.95 while Singapore Airlines gained 1.5 percent to SG$10.16.
— Jakarta ended down 1.63 percent or 74.91 points at 4,510.48.
IT firm Multipolar Technology gained 4.69 percent to 1,340 rupiah, while media company Media Nusantara Citra fell 6.37 percent to 1.910 rupiah.
— Bangkok closed down 2.56 percent, falling 36.13 points to 1,372.61.