Chinese stocks tumbled Monday as worries about anti-Japanese protests on the mainland, and concerns that Beijing was less likely to loosen its policies in the wake of the Federal Reserve’s monetary stimulus, damped investor sentiment.
Most of the other major markets rose in the region, however, on lingering optimism a weaker dollar and a general improvement in risk appetite would spur fund inflows and support stocks.
“After the European Central bank and the Fed adopted easier monetary policy, analysts now believe it’s very unlikely that China will follow suit,” said Ben Kwong, chief operating officer at KGI Asia.
“The tension between Japan and China has also provided another excuse, and the impact is more serious on the Chinese stock markets,” Kwong said.
China’s Shanghai Composite 000001 sank 2.1% its worst percentage loss since its 2.4% drop on July 9, while South Korea’s Kospi SEU fell 0.3%.
Elsewhere in Asia, Australia’s S&P/ASX 200 Index XJO managed a 0.3% gain, Taiwan’s Taiex gained 0.3% and India’s Sensex advanced 0.6% in afternoon trade after the country’s central bank acted to ease liquidity.
The Hang Seng IndexHSI rose 0.1%, with energy sector shares among those climbing.
Japanese markets were closed for a holiday.
Property, brokerage and airline stocks were among those hit on mainland bourses Monday. Shares of Citic Securities Co. 600030 skidded 4.1%, Poly Real Estate Group Co. 600048 stumbled 6.7% and China Southern Airlines Co. ZNH600029 lost 4%.
Property developers also lost ground in Hong Kong after the Hong Kong Monetary Authority took fresh steps to cool home prices by tightening mortgage lending on Friday.
Sino Land Co. 83SNLAY fell 2.1% and New World Development Co. 17 NDVLY shed 0.7%.
Concern about the anti-Japan sentiment in popular protests in China also weighed appeared to weigh on the market, with KGI’s Kwong saying there could be more fallout on the markets if the protests escalated.
Monday in Hong Kong, shares of Guangzhou Automobile Group Co. 2238 which operates automobile joint ventures with Honda Motor Co. 7267 HMC and Toyota Motor Corp. TM7203, tumbled 4.6% amid such concerns.
Several commodity firms were gaining on Monday amid ongoing strength in commodity prices.
Energy producer Cnooc Ltd. CEO 883 rising 3.7% and gold miner Zhaojin Mining Industry Co. 1818 ZHAOF adding 1.8%.
In Sydney, BHP Billiton Ltd. BHPBHP and Rio Tinto Ltd. RIO RIORIORIOrose 2.5% and 1.6%, respectively.
Marketwatch
