Asia-based stocks see­saw as Shang­hai ex­tends rout

The China Post - - BUSINESS INDEX & -

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.

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