HONG KONG (MarketWatch) — Most Asian markets declined Tuesday as investors fretted about the implications of the Cyprus bailout agreement for other euro-zone countries, with commodity and financial stocks leading the retreat.
The broad losses came in the wake of downbeat cues from the European and U.S. stock markets on Monday, amid concerns that deposit holders in ailing European economies other than Cyprus may also be at risk in the future. Here’s the gloss on those Dutch minister’s Cyprus comments.
“The relief rally that followed the 10 billion euros ($13 billion) Cyprus deal made way for growing concerns that this approach may become the ‘new norm’ for any future bailout of troubled banks,” said Matthew Sherwood, head of investment research at Perpetual Investments.
“More importantly, this demonstrates that government funds for bank bailouts are near exhaustion and that the rules can be re-written at any time by any authority,” Sherwood added.
The Shanghai Composite Index /zigman2/quotes/206600939/delayed CN:000001 -0.33% fell 1.3% to 2,297.67, leading the region’s losses.
On the upside, Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.73% finished 0.3% higher after a choppy trading session, while South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -1.28% edged up 0.3%.
Shares of several resource-sector companies dropped sharply around the region.
Rio Tinto Ltd. /zigman2/quotes/200083756/delayed AU:RIO -1.83% /zigman2/quotes/202627887/composite RIO -1.56% fell 2.3% and Paladin Energy Ltd. /zigman2/quotes/203269866/delayed AU:PDN -1.20% shed 2.5% in Sydney; Nippon Steel & Sumitomo Metal Corp. /zigman2/quotes/209782682/delayed JP:5401 -1.22% /zigman2/quotes/203679980/delayed NISTF +1.77% dropped 2.1% and JFE Holdings Inc. /zigman2/quotes/204336633/delayed JP:5411 +1.14% /zigman2/quotes/203557603/delayed JFEEF -7.70% declined 2.7% in Tokyo; and Hyundai Steel Co. /zigman2/quotes/203290957/delayed KR:004020 -1.18% lost 0.9% in Seoul.
In Shanghai, Baoshan Iron & Steel Co. /zigman2/quotes/203255146/delayed CN:600019 +1.72% declined 2.1%, Yanzhou Coal Mining Co. /zigman2/quotes/203784640/delayed CN:600188 +1.09% shed 5.2% and China Coal Energy Co. /zigman2/quotes/205321671/delayed CCOZY -1.24% /zigman2/quotes/201486584/delayed HK:1898 +0.77% dropped 0.5%.
In Hong Kong trading, shares of Yanzhou /zigman2/quotes/208182033/delayed HK:1171 +0.17% fell 0.9% and China Shenhua Energy Co. /zigman2/quotes/206839995/delayed CSUAY -1.97% /zigman2/quotes/206065610/delayed HK:1088 +0.15% dropped 1.2%, while Aluminum Corp. of China Ltd. /zigman2/quotes/208051344/composite ACH -2.14% /zigman2/quotes/202960704/delayed HK:2600 -1.39% gave up 1.6%.
Banks also suffered losses, with China Minsheng Banking Corp. /zigman2/quotes/203910009/delayed CN:600016 +0.52% /zigman2/quotes/200749234/delayed CMAKY -7.99% losing 4.6% and China Construction Bank Corp. /zigman2/quotes/208058581/delayed CN:601939 +0.15% /zigman2/quotes/207732534/delayed CICHY -0.44% falling 2.3% in Shanghai.
In Hong Kong, shares of heavyweight HSBC Holdings PLC /zigman2/quotes/202687335/delayed HK:5 -0.80% , which has a major presence in Europe, dropped 0.5%.
Property shares outperformed the broader market in Shanghai, recouping some of the sharp losses suffered so far this month. Gemdale Corp. /zigman2/quotes/208026094/delayed CN:600383 +6.25% added 0.3%, while Poly Real Estate Group Co. /zigman2/quotes/201864015/delayed CN:600048 +4.78% ended unchanged.
The gains came despite worries that policy makers might take further measures to curb property prices. Hu Cunzhi, China’s vice minister of land and resources reportedly said over the weekend that the government should crack down on speculators by imposing home ownership tax on those with three or more properties across the nation.
Relief rally for Cyprus soon fizzles
A bailout deal for Cyprus to avoid bankruptcy gave the markets little boost, Katie Martin reports.
Strategists at Bank of America Merrill Lynch said a nationwide rollout of property tax could only start some time during 2016-2017, but would be a “major long-term negative to the property market.”
On the upside in Hong Kong, shares of Henderson Land Development Co. /zigman2/quotes/208724890/delayed HK:12 +0.42% /zigman2/quotes/200560946/delayed HLDCY -1.70% climbed 5.5% after it announced a 28% increase in 2012 profit and a bonus share issue.
In Japan, exporters were broadly lower following weak global cues, with Sony Corp. /zigman2/quotes/208567357/composite SNE -0.55% /zigman2/quotes/201361720/delayed JP:6758 -1.57% down 2.7% and Honda Motor Corp. /zigman2/quotes/207173990/composite HMC -0.69% /zigman2/quotes/200490352/delayed JP:7267 +0.36% off 1%.
Still, some exporters came off their early lows in Japanese trade as the yen weakened after new central bank Gov. Haruhiko Kuroda renewed his pledge to do “whatever it takes” to beat deflation and reach a 2% inflation target. Read full story on Kuroda’s remarks.
Shares of Olympus Corp. /zigman2/quotes/200860615/delayed JP:7733 -1.01% /zigman2/quotes/206207642/delayed OCPNY -0.11% ended fractionally higher, and NEC Corp. /zigman2/quotes/205173342/delayed JP:6701 -1.84% /zigman2/quotes/203814274/delayed NIPNF 0.00% advanced 4.1%.
Korean exporters advanced amid losses in Japan, meanwhile, with car maker Hyundai Motor Co. /zigman2/quotes/206684590/delayed KR:005380 0.00% /zigman2/quotes/204364212/delayed HYMTF +3.81% rising 2.3% and consumer electronics giant Samsung Electronics Co. /zigman2/quotes/209800866/delayed KR:005930 -2.42% /zigman2/quotes/202367843/delayed SSNLF 0.00% adding 0.9%.