Asia-based stocks seesaw as Shanghai extends rout
Asian markets were mixed after a seesaw session on Tuesday, with Tokyo diving and Shanghai extending its worst rout in almost 20 years, while other regional markets bounced into positive territory.
Shanghai plummeted 7.63 percent, or 244.94 points, to 2,964.97, wiping out the year’s gains and continuing its steepest four-day rout since 1996.
Tokyo dropped 3.85 percent to close 733.98 points lower at 17,806.70 — its sixth straight day of falls and the lowest finish since mid-February.
But other regional shares bounced back into positive territory after a bruising session overnight that saw Wall Street fall the most since the height of the financial crisis and European equities slump.
Sydney closed up 2.72 percent or 136.02 points at 5,137.30, while Seoul rose 0.92 percent, or 16.82 points, at 1,846.63 and Hong Kong added 0.72 percent, or 153.39 points, to close at 21,404.96.
“It will take a big policy reaction out of China” to trigger a proper rebound in global shares, Isao Kubo a strategist at Nissay Asset Management, told Bloomberg News.
“It’s best to expect high volatility for the foreseeable future rather than jump to conclusions about if this is the end or not.”
‘Running out of room’
Global equities took a battering overnight after an almost 8.50 percent slump in Shanghai — the heaviest daily loss since 2007 — sparked panic among world investors.
Chinese shares have been on a roller-coaster ride after a year-long debt-fuelled rally collapsed in mid-June, prompting the government to unleash a vast package of measures to support shares.
In its latest move, mainland China’s central bank late Tuesday cut benchmark interest rates and the amount of cash banks must keep on hand, reducing lending and deposit interest rates by 0.25 percentage points each and its reserve requirement ratio (RRR) by 0.50 percentage points.
These take effect Wednesday, the People’s Bank of China said, and follow similar tandem cuts in late June.
The news comes after Beijing said Sunday the state pension fund will now buy stocks. On Tuesday the central bank also injected 150 billion yuan (US$23.4 billion) into the money market to ease tight liquidity.
Gold traded at 1,149.80 compared to US$1,154.00 late Monday. In other markets: — Wellington added 0.11 percent, or 5.98 points, to 5,613.29.
Contact Energy rose 2.70 percent to NZ$5.32 and Air New Zealand was down 0.75 percent to NZ$2.65.
— Manila rose 0.58 percent, or 39.33 points, to 6,830.34 although trading was suspended for much of the day due to technical problems.
Ayala Land was down 0.74 percent to 33.50 pesos, Universal Robina was unchanged at 180 pesos and BDO Unibank was down 0.95 percent at 94.10 pesos.
— Bangkok gained 1.75 percent, or 22.82 points, to 1,323.88.
Travel industry stocks led the gains with Airports of Thailand jumping 3.54 percent to 263.00 baht while Bumrungrad Hospital, a popular medical tourist desti- nation, soared 7.04 percent 228.00 baht.
— Kuala Lumpur ended up 2.08 percent, or 31.80 points, at 1,563.94.
Sime Darby added 1.42 percent to 7.12 ringgit, Telekom Malaysia gained 4.68 percent to 6.48 ringgit while Maybank lost 0.12 percent to 8.31 ringgit.
— Jakarta ended up 1.56 percent, or 64.77 points, at 4,228.50.
Lender Bank Mandiri gained 3.98 percent to 8,500 rupiah, while conglomerate Astra International slipped 1.32 percent to 5,600 rupiah.
— Singapore closed up 1.51 percent, or 42.90 points higher at 2,886.29.
United Overseas Bank climbed 3.77 percent to end at SG$19.25 and oil rig maker Keppel Corp surged 7.70 percent to end at SG$6.99.
— Mumbai rose 1.13 percent, or 290.82 points, to close at 26,032.38.
Natural resources company Vedanta increased 7.73 percent to 86.45 rupees after plunging more than 15 percent on Monday while Housing Development Finance Corporation fell 1.82 percent to 1145.60 rupees.