HONG KONG (MarketWatch) — Chinese stocks finished at their lowest level in nearly three years to lead broad losses among major Asian markets Thursday, as worries about the property sector and tight liquidity conditions hit investor sentiment.
Japanese and Australian stocks also declined as investors turned more cautious after Wednesday’s rally amid more fears over the European debt situation, while energy producers helped lift Hong Kong stocks on rising crude-oil prices.
In China, the Shanghai Composite /zigman2/quotes/206600939/delayed CN:000001 -3.42% fell 1% to 2,148.45, dropping to its lowest closing level since March 2009, and again failing to latch on to early gains. The Shenzhen Composite plunged 3.5% to 813.99.
China cancels nearly all reality TV shows
China implements its decision to cancel about two-thirds of all entertainment programming that it considers to be in poor taste. Photo: REUTERS/Barry Huang
“The market is listless... people are waiting for some kind of breakthrough [from the U.S.] and waiting for the announcement of the reduction of the reserve requirement ratios from mainland China,” said Peter Lai, Hong Kong-based director at DBS Vickers.
Chinese developers broadly declined after property major China Vanke Co. Wednesday reported a 30% tumble in December sales. China Vanke shares dropped 1.1% and Oceanwide Real Estate Group Co. /zigman2/quotes/205304349/delayed CN:000046 -4.19% lost 1.5% in Shenzhen. Poly Real Estate Group Co. /zigman2/quotes/201864015/delayed CN:600048 -3.40% eased 2.5% in Shanghai, while China Overseas Land & Investment Ltd. /zigman2/quotes/202573805/delayed CAOVY -0.80% /zigman2/quotes/205731176/delayed HK:688 -0.74% declined 2.5% in Hong Kong.
In wider markets, Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -1.91% lost 0.8% to 8,488.71, Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO +0.04% fell 1.1% to 4,142.70 and South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -0.93% slipped 0.1% to 1,863.74.
Among the gainers, Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.15% added 0.5% to 18,813.41 and Taiwan’s Taiex rose 0.7% to 7,130.86.
The performance in Asia followed a mixed finish for U.S. benchmark indexes and after European banks were sold off Wednesday as Italian lender UniCredit SpA /zigman2/quotes/200769686/delayed IT:UCG -0.89% sold new shares at a sharp discount. There was also caution ahead of a French auction of long-term debt later Thursday.
Several financial stocks were hurt, with Mitsubishi UFJ Financial Group Inc. losing 1.2% in Tokyo, National Australia Bank Ltd. /zigman2/quotes/210431826/delayed AU:NAB +0.43% /zigman2/quotes/208329321/delayed NABZY -0.66% falling 1.9% in Sydney and Shinhan Financial Group Co. /zigman2/quotes/200043823/composite KB 0.00% dropping 0.9% in Seoul.
Some Chinese banks bucked the trend, with China Construction Bank Corp. /zigman2/quotes/208974133/delayed HK:939 0.00% /zigman2/quotes/207732534/delayed CICHY -1.09% /zigman2/quotes/208058581/delayed CN:601939 -1.13% rising 1.8% in Shanghai and 0.4% in Hong Kong.
“The reduction of the reserve requirement ratios will be beneficial to the mainland [Chinese] banks and consumer stocks. [Offshore] funds are buying the ... mainland banks because they believe the RRR will be reduced [as early as] next week,” DBS Vickers’ Lai said.
Japanese technology shares lost ground as the euro /zigman2/quotes/210561215/realtime/sampled EURJPY -0.1412% weakened against the yen.
Sony Corp. /zigman2/quotes/201361720/delayed JP:6758 -0.49% /zigman2/quotes/208567357/composite SNE -0.98% lost 2.2% and Casio Computer Co. /zigman2/quotes/202492162/delayed JP:6952 -1.87% /zigman2/quotes/206719136/delayed CSIOY +1.10% gave up 1.5%.
Chip maker Elpida Memory Inc. sank 7.4%, after the company confirmed a report that it is in discussions with some of its clients about possibly receiving financial support from them. See report on latest Elpida comments.
Commodity-linked stocks mostly outperformed in Hong Kong, but declined in Sydney after recording solid gains Wednesday.
Cnooc Ltd. /zigman2/quotes/204964401/composite CEO -1.27% /zigman2/quotes/203421416/delayed HK:883 +0.31% climbed 2.8% to extend a string of recent gains, while PetroChina Co. /zigman2/quotes/205108732/composite PTR -1.60% /zigman2/quotes/204979431/delayed HK:857 0.00% added 1.6% in Hong Kong.
In Sydney, BHP Billiton Ltd. /zigman2/quotes/201448516/delayed AU:BHP -1.53% /zigman2/quotes/208108397/composite BHP -2.16% dropped 1.1% and Alumina Ltd. /zigman2/quotes/210515632/delayed AU:AWC -3.02% lost 3%.