HONG KONG (MarketWatch) — Shanghai and Hong Kong stock markets finished lower Wednesday as banks tumbled on reports Singapore’s Temasek Holdings will raise up to $3.7 billion by selling down its stakes in Bank of China Ltd. and China Construction Bank Corp.
But Japanese stocks rose for a seventh straight session for their best finish since the March 11 earthquake, with car makers and other exporters among the leading gainers.
China’s Shanghai Composite Index /zigman2/quotes/206600939/delayed CN:000001 +0.26% ended the day 0.2% lower at 2,810.48, and Hong Kong’s Hang Seng Index fell 1% to 22,517.55, with banks driving the losses in both markets.
Peter Lai, a director at DBS Vickers, said the partial stake sale by Temasek — which has been a strategic shareholder in both CCB and Bank of China since before the lenders listed shares in Hong Kong — wasn’t surprising, as it was natural for the Singapore state-owned fund to take a profit on it investments. Read full story on Temasek’s stake sell-down in the Chinese banks.
However, “in the short term, this is undoubtedly detrimental psychologically,” he said, as the market may now worry other strategic investors will look to follow Temasek’s lead by selling down their respective stakes in Chinese lenders.
Shares of Bank of China /zigman2/quotes/201568493/delayed BACHY +0.79% /zigman2/quotes/209359942/delayed CN:601988 +0.56% /zigman2/quotes/204682472/delayed HK:3988 +0.63% tumbled 3.6%, and CCB /zigman2/quotes/208058581/delayed CN:601939 +0.15% /zigman2/quotes/207732534/delayed CICHY +1.33% /zigman2/quotes/208974133/delayed HK:939 +1.24% shed 3.2% in Hong Kong; the stocks lost 1.3% and 1.4%, respectively, in Shanghai.
The losses also rubbed off on sentiment toward other banks, sending Industrial & Commercial Bank of China Ltd. /zigman2/quotes/201401473/delayed HK:1398 +0.91% /zigman2/quotes/202525815/delayed CN:601398 +0.37% /zigman2/quotes/204265987/delayed IDCBF +2.76% 2.5% lower in Hong Kong and 0.9% in Shanghai.
The extended losses for these banks came a day after Moody’s Investors Service warned that a Chinese audit last month understated the risks to loans made by them to Chinese local governments. See report on Moody’s remarks on Chinese banks.
Meanwhile, Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +0.89% ended the day 1.1% higher at 10,082.48, Taiwan’s Taiex climbed 0.5% to 8,824.44, Australia’s S&P/ASX 200 Index /zigman2/quotes/210598100/delayed AU:XJO +0.43% added 0.2% to 4,605.0, and South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +0.07% gained 0.4% to 2,171.19.
In Tokyo, shares of Honda Motor Co. /zigman2/quotes/207173990/composite HMC +0.11% /zigman2/quotes/200490352/delayed JP:7267 -0.07% rose 1.6% and Nissan Motor Co. /zigman2/quotes/207656007/delayed NSANY +1.83% /zigman2/quotes/208298710/delayed JP:7201 +2.00% added 2.2% amid hopes for a better outlook for the second half of the year as production improves.
Other exporters also advanced, with Sony Corp. /zigman2/quotes/208567357/composite SNE +0.65% /zigman2/quotes/201361720/delayed JP:6758 +1.45% climbing 1.2% and Fanuc Ltd. /zigman2/quotes/209410825/delayed FANUY +0.19% /zigman2/quotes/202054799/delayed JP:6954 +0.15% adding 1.9%.
In Seoul, Hynix Semiconductor Inc. tumbled 5.4% to lose more ground than it gained the previous day, after Hyundai Heavy Industries Co. said it won’t submit a letter of intent for a controlling stake in the chip maker. Hyundai Heavy, on the other hand, soared 6.4% on the announcement. See report on Hyundai Heavy and Hynix.
Some financial stocks gave way after U.S. bank shares lost ground overnight.
In Tokyo, Mitsubishi UFJ Financial Group Inc. /zigman2/quotes/207520099/delayed JP:8306 -0.92% surrendered 0.5% and Daiwa Securities Group Inc. /zigman2/quotes/201391978/delayed JP:8601 -2.15% /zigman2/quotes/206649614/delayed DSECF +14.86% fell 0.8%.
In Sydney trading, shares in Westpac Banking Corp. /zigman2/quotes/203084975/delayed AU:WBC -0.50% /zigman2/quotes/206661702/composite WBK -0.52% lost 0.4%, while Commonwealth Bank of Australia /zigman2/quotes/200638713/delayed AU:CBA -0.49% /zigman2/quotes/206886809/delayed CBAUY 0.00% dropped 0.6%.
Also weighing on financials, Moody’s on Tuesday downgraded Portugal’s long-term government bond ratings to speculative or “junk” grade. Read more about Moody’s cutting Portugal’s debt rating.
Strength in commodities prices supported some energy stocks, as benchmark Nymex crude-oil futures pushed above $97 a barrel. That lifted Japan Petroleum Exploration Co. /zigman2/quotes/201212147/delayed JP:1662 -0.80% /zigman2/quotes/202925532/delayed JPTXF -1.12% to rise 3.8%, while Woodside Petroleum Ltd. /zigman2/quotes/203437212/delayed AU:WPL +1.06% /zigman2/quotes/206770672/delayed WOPEF +3.37% edged up 0.2% in Sydney and PetroChina Co. /zigman2/quotes/206980083/delayed CN:601857 -0.37% /zigman2/quotes/205108732/composite PTR +0.38% advanced 1.2% in Shanghai.
Gold miners sparkled after gold futures posted their biggest one-day gain in eight months in New York, with Newcrest Mining Ltd. /zigman2/quotes/203840223/delayed AU:NCM 0.00% /zigman2/quotes/206026738/delayed NCMGF +0.32% advancing 1.8% in Sydney, and Zhaojin Mining Industry Co. /zigman2/quotes/203361399/delayed HK:1818 +2.67% /zigman2/quotes/200275285/delayed ZHAOF +0.77% gaining 3.3% in Hong Kong. Read more about metals.