Chinese stocks reversed direction on Tuesday, with Shanghai falling to lead the Asia region mostly lower as optimism over supportive policy measures from Beijing soured.
The Shanghai Composite Index sat 1.9% lower on the Chinese mainland in late afternoon trade, while Hong Kong’s Hang Seng Index was down a milder 0.3%.
“People are waiting for announcements from the National People’s Congress and U.S. economic data” for direction, said DBS Vickers director Peter Lai.
The National People’s Congress, China’s top legislature, is currently holding its annual meeting, and Lai said that investors are focused on any sign of “concrete measures to boost the Chinese economy and stock market.”
On Tuesday, however, China’s banking regulator launched a probe of wealth-management products, with RBC Capital Markets strategist Sue Trinh saying Shanghai “was dragged down” by a drop in bank shares after the probe was announced.
Trading with losses in Shanghai, Ping An Bank Co. fell 3.3%, while China Citic Bank Corp. lost 1.5%, and China Merchants Bank Co. declined 0.5%.
Meanwhile, environmental-related firms also fell significantly, after recent strong gains, with Tianjin Capital Environmental Protection Group Co. down 5.1%, Zhongyuan Environment-Protection Co. dropping 6%, Chengdu Xingrong Investment Co. losing 6.2%, and Beijing Capital Co. moving lower by 5.4%.
In an environmental incident Monday, a large number of pigs were found dead in a river near Shanghai, and Bloomberg Tuesday put the amount at 2,800. The reason for the deaths isn’t yet known.
Property companies rose in Hong Kong — rebounding after news of tighter housing curbs sent the sector tumbling last week — with Sun Hung Kai Properties Ltd. up 0.8%, and New World Development Co. higher by 2%, while Sino Land Ltd. rose 1.9%.
On the initial-public-offering front, Oi Wah Pawnshop Credit Holdings Ltd. soared almost 30% in its Hong Kong trading debut, with the move capping a largely successful IPO that drew strong investor interest.
However, China Life Insurance Co. , fell 3%, while light-rail operator MTR Corp. lost 1.7% after reporting a drop in 2012 net profit to weigh on the market.
In Japanese trading, the Nikkei Stock Average ended with a 0.3% loss after rising 9.7% advance over the previous eight sessions.
Japanese stocks have gained 18.5% since the start of the year, helped by the prospect of further monetary easing as part of measures to lift the country out of deflation.
In part, the gain has come as government rhetoric and some moves by the Bank of Japan to deliver on that plan have weakened the yen dramatically over the past few months.
On Tuesday, the dollar took its year-to-date gains against the yen to 11.2% by rising to ¥96.42, after briefly hitting a level last seen in August 2009.
The advance occurred after a Nikkei news report suggested Haruhiko Kuroda, the Bank of Japan governor-designate, may add fresh monetary-easing measures even before the central bank’s next meeting in April.
The falling yen has helped exporter stocks, and Tuesday saw consumer electronics group Panasonic Corp. close with a 4.6% gain, while Mitsubishi Motors Corp. rose 3.7%.
Tech major Advantest Corp. rose 2.9% after its president told the Nikkei business daily that orders in the current fiscal year will likely exceed estimates by 20%.
Among other major Asian markets, Taiwan’s Taiex lost 0.6%, South Korea’s Kospi gave up 0.5%, and Australia’s S&P/ASX 200 index finished down 0.6%.
Energy firms fell in Sydney, with Karoon Gas Australia Ltd. losing 4.9%, and Whitehaven Coal Ltd. falling 5.5%.
New laws proposed Tuesday by the Australian government will see some coal-mining and coal-seam-gas developments subject to federal assessment if they impact water resources.
South Korean shares were pressured by tech-sector losses, with heavyweight Samsung Electronics Inc. lower by 1.1%, and SK Hynix Inc. down 1.4%.
Marketwatch
