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June 20, 2013, 4:31 a.m. EDT

Asia stocks take double hit from Fed, China

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By V. Phani Kumar, MarketWatch

HONG KONG (MarketWatch) — Asian stocks tumbled Thursday as a deterioration in Chinese manufacturing activity and a further spike in Shanghai interbank lending rates applied more selling pressure after the Federal Reserve signaled it may wind down its bond purchases.

Stocks in Hong Kong and Sydney were slammed after preliminary data released by HSBC showed its China Purchasing Managers’ Index for June slipped to a nine-month low of 48.3, staying under the 50-point level for a second straight month. A reading below 50 shows conditions worsened.

The Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.73%  slumped 2.9% to finish the day at a nine-month low, and the Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP -0.83% dropped 2.8% for its for its lowest close in more than six months.

/zigman2/quotes/210598030/delayed HSI 26,696.49, -196.74, -0.73%
/zigman2/quotes/210598127/delayed SHCOMP 2,987.93, -25.12, -0.83%
/zigman2/quotes/210598065/realtime DJIA 27,081.36, -879.44, -3.15%
One-month price chart
Hang Seng Index and Shanghai Composite Vs. Dow Jones industrials

“Beijing prefers to use reforms rather than stimulus to sustain growth. While reforms can boost long-term growth prospects, they still have limited impact in the short term,” HSBC China economist Hongbin Qu said in a statement accompanying the PMI release.

The losses came as two short-term interbank money market rates jumped to record levels , while the People’s Bank of China refrained from injecting liquidity.

“Money conditions have tightened sharply. ... Such monetary tightening is inconsistent with recent soft patch in terms of growth and a weakening of price pressures,” said Dariusz Kowalczyk, a senior economist at Credit Agricole.

Meanwhile, Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -2.31%  fell 2.1%, South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -1.28%  lost 2%, Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.79%  gave up 1.7% and Taiwan’s Taiex dropped 1.4%, after the Fed’s guidance on its bond purchases overnight.

“What caught the market off guard is that the Fed anticipates the pace of recovery in the labor market to be quicker than what the market previously predicted. Consequently, the possibility of scaling down the current bond-buying program is likely to be sooner than what is currently priced in,” said CMC Markets sales trader Miguel Audencial.

Commodity-sector stocks were hurt across the region as prices for gold and other metals dropped after the Fed’s announcement.


Reuters Enlarge Image
Japan stocks join peers in other Asia markets as casualties of the Federal Reserve’s signal that it may slow its bond buying soon.

Shares of Cnooc Ltd. /zigman2/quotes/203421416/delayed HK:883 -1.73%   /zigman2/quotes/204964401/composite CEO -2.94%  skidded 4.4% and gold miner Zijin Mining Corp. /zigman2/quotes/204517000/delayed HK:2899 -0.82% /zigman2/quotes/209836076/delayed ZIJMF -9.61%  fell 1.8% in Hong Kong, while Jiangxi Copper Co. /zigman2/quotes/201334192/delayed CN:600362 -0.21% /zigman2/quotes/204256025/delayed JIXAY -8.05%  slid 3.9% in Shanghai.

In Sydney, Fortescue Metals Group Ltd. /zigman2/quotes/202351558/delayed AU:FMG -0.46% /zigman2/quotes/204116626/delayed FSUMF +1.43%  lost 6.6%, also weighed after it cut its outlook for iron-ore shipments, and gold miner Newcrest Mining Ltd. /zigman2/quotes/203840223/delayed AU:NCM -2.92% /zigman2/quotes/206026738/delayed NCMGF -0.89%  gave up 3.6%.

Energy producer Inpex Corp. /zigman2/quotes/206689846/delayed JP:1605 -2.91%   /zigman2/quotes/206936121/delayed IPXHF +5.94% dropped 3.7% in Tokyo, and Korea Zinc Co. /zigman2/quotes/202765860/delayed KR:010130 -0.12%  gave up 1.6% in Seoul.

Chinese banks extended losses in the absence of any efforts by policy makers to ease tight money-market conditions.

Heavyweight stock China Construction Bank Corp. /zigman2/quotes/208062653/delayed HK:9 +3.82% /zigman2/quotes/208974133/delayed HK:939 -0.63%   /zigman2/quotes/207732534/delayed CICHY -0.44%   /zigman2/quotes/208058581/delayed CN:601939 +0.15%  lost 5.2%, and Industrial & Commercial Bank of China Ltd. /zigman2/quotes/201401473/delayed HK:1398 -0.93%   /zigman2/quotes/202401350/delayed IDCBY -1.17%   /zigman2/quotes/202525815/delayed CN:601398 0.00%  shed 3.8% in Hong Kong. The banks’ Shanghai-listed shares fell 2% and 2.2%, respectively.

The People’s Bank of China — China’s central bank — “is worried by the unsustainable growth rate of credit and is sending a message that market participants shouldn’t take for granted that they will always have access to cheap interbank loans,” Capital Economics wrote in a note to clients.

Click to Play

The Next 24: International markets react to Fed

Overseas stocks react to today's Fed news, while Rite Aid and Kroger are due to report before the U.S. open.

Real-estate stocks retreated in Japan after the Fed’s decision, with Sumitomo Realty & Development Co. /zigman2/quotes/206628792/delayed JP:8830 -2.75%  losing 4.9% and Mitsui Fudosan Co. /zigman2/quotes/205394574/delayed JP:8801 -2.41%   /zigman2/quotes/208297288/delayed MTSFF -7.29%  dropping 3.8%.

Among other notable decliners, shares of Nikon Corp. /zigman2/quotes/203281219/delayed JP:7731 +0.09% /zigman2/quotes/209396469/delayed NINOY +0.05%  fell 5.8%, Hitachi Construction Machinery Corp. /zigman2/quotes/205375504/delayed JP:6305 -0.42% /zigman2/quotes/202415695/delayed HTCMY -6.50%  gave up 5.3%, and convenience-store operator Seven & I Holdings Co. /zigman2/quotes/207666111/delayed JP:3382 +0.59% /zigman2/quotes/210292336/delayed SVNDY +1.11% shed 2.7%.

But some automobile exporters advanced as the U.S. dollar jumped after a rally in Treasury yields overnight in the wake of the Fed decision. Shares of Subaru-maker Fuji Heavy Industries Co. /zigman2/quotes/203522406/delayed JP:7270 -0.86% /zigman2/quotes/200526066/delayed FUJHY +0.92%  rose 1%, and Mazda Motor Corp. /zigman2/quotes/204777714/delayed JP:7261 -2.39% /zigman2/quotes/206326885/delayed MZDAY -3.71%  climbed 2.2%.

Banks and other high dividend-yield issues fell in Australia after the the Australian dollar /zigman2/quotes/210560947/realtime/sampled AUDUSD -0.5451%  got knocked below 93 U.S. cents in the wake of the Fed’s decision.

Shares of Westpac Banking Corp. /zigman2/quotes/203084975/delayed AU:WBC -1.67%   /zigman2/quotes/206661702/composite WBK -1.89%  lost 3.7%, and Commonwealth Bank of Australia /zigman2/quotes/200638713/delayed AU:CBA -1.67% /zigman2/quotes/207018701/delayed CBAUF +0.35%  fell 3.1%.

/zigman2/quotes/210598030/delayed
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26,696.49
-196.74 -0.73%
Volume: 2.04M
Feb. 26, 2020 4:08p
loading...
/zigman2/quotes/210598127/delayed
CN : China: Shanghai
2,987.93
-25.12 -0.83%
Volume: 46.90B
Feb. 26, 2020 3:01p
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/zigman2/quotes/210598100/delayed
AU : S&P ASX
6,708.10
-158.50 -2.31%
Volume: 1.01M
Feb. 26, 2020 5:38p
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/zigman2/quotes/210598069/delayed
KR : Korea Exchange
2,076.77
-26.84 -1.28%
Volume: 810,937
Feb. 26, 2020 3:32p
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/zigman2/quotes/210597971/delayed
JP : Nikkei
22,426.19
-179.22 -0.79%
Volume: 0.00
Feb. 26, 2020 3:15p
loading...
/zigman2/quotes/203421416/delayed
HK : Hong Kong
HK$ 11.36
-0.20 -1.73%
Volume: 78.66M
Feb. 26, 2020 4:08p
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Market Cap
HK$516.13 billion
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loading...
/zigman2/quotes/204964401/composite
US : U.S.: NYSE
$ 144.44
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Volume: 206,421
Feb. 25, 2020 6:30p
P/E Ratio
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Market Cap
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/zigman2/quotes/204517000/delayed
HK : Hong Kong
HK$ 3.64
-0.03 -0.82%
Volume: 36.85M
Feb. 26, 2020 4:08p
P/E Ratio
19.64
Dividend Yield
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Market Cap
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loading...
/zigman2/quotes/209836076/delayed
US : U.S.: OTC
$ 0.45
-0.05 -9.61%
Volume: 59,500
Feb. 25, 2020 2:46p
P/E Ratio
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Dividend Yield
N/A
Market Cap
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$872,997
loading...
/zigman2/quotes/201334192/delayed
CN : China: Shanghai
¥ 14.52
-0.03 -0.21%
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Feb. 26, 2020 3:00p
P/E Ratio
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Dividend Yield
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Market Cap
¥50.38 billion
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loading...
/zigman2/quotes/204256025/delayed
US : U.S.: OTC
$ 47.72
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Volume: 500.00
Feb. 25, 2020 2:49p
P/E Ratio
30.82
Dividend Yield
2.15%
Market Cap
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Rev. per Employee
$1.55M
loading...
/zigman2/quotes/202351558/delayed
AU : Australia: Sydney
$ 10.88
-0.05 -0.46%
Volume: 15.59M
Feb. 26, 2020 4:10p
P/E Ratio
4.68
Dividend Yield
9.19%
Market Cap
$33.64 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/204116626/delayed
US : U.S.: OTC
$ 7.10
+0.10 +1.43%
Volume: 1,941
Feb. 25, 2020 2:35p
P/E Ratio
4.39
Dividend Yield
N/A
Market Cap
$21.85 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/203840223/delayed
AU : Australia: Sydney
$ 28.24
-0.85 -2.92%
Volume: 3.15M
Feb. 26, 2020 4:10p
P/E Ratio
27.11
Dividend Yield
1.18%
Market Cap
$22.32 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/206026738/delayed
US : U.S.: OTC
$ 18.93
-0.17 -0.89%
Volume: 6,835
Feb. 25, 2020 2:11p
P/E Ratio
26.08
Dividend Yield
N/A
Market Cap
$14.52 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/206689846/delayed
JP : Japan: Tokyo
¥ 990.30
-29.70 -2.91%
Volume: 9.65M
Feb. 26, 2020 3:00p
P/E Ratio
9.21
Dividend Yield
3.64%
Market Cap
¥1489.40 billion
Rev. per Employee
¥291.81M
loading...
/zigman2/quotes/206936121/delayed
US : U.S.: OTC
$ 9.10
+0.51 +5.94%
Volume: 15,781
Feb. 25, 2020 8:10p
P/E Ratio
9.21
Dividend Yield
N/A
Market Cap
$13.29 billion
Rev. per Employee
$2.64M
loading...
/zigman2/quotes/202765860/delayed
KR : S. Korea: KRX
427,000
-500.00 -0.12%
Volume: 40,463
Feb. 26, 2020 3:30p
P/E Ratio
12.93
Dividend Yield
2.58%
Market Cap
₩7555.74 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/208062653/delayed
HK : Hong Kong
HK$ 0.14
+0.0050 +3.82%
Volume: 192,000
Feb. 26, 2020 4:08p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
HK$467.51 million
Rev. per Employee
HK$1.04M
loading...
/zigman2/quotes/208974133/delayed
HK : Hong Kong
HK$ 6.32
-0.04 -0.63%
Volume: 446.69M
Feb. 26, 2020 4:08p
P/E Ratio
5.30
Dividend Yield
5.52%
Market Cap
HK$1590.07 billion
Rev. per Employee
HK$3.31M
loading...
/zigman2/quotes/207732534/delayed
US : U.S.: OTC
$ 15.99
-0.07 -0.44%
Volume: 296,296
Feb. 25, 2020 3:59p
P/E Ratio
5.20
Dividend Yield
4.71%
Market Cap
$1962.40 billion
Rev. per Employee
$422,749
loading...
/zigman2/quotes/208058581/delayed
CN : China: Shanghai
¥ 6.65
+0.01 +0.15%
Volume: 83.82M
Feb. 26, 2020 3:00p
P/E Ratio
6.25
Dividend Yield
4.60%
Market Cap
¥1660.07 billion
Rev. per Employee
¥2.76M
loading...
/zigman2/quotes/201401473/delayed
HK : Hong Kong
HK$ 5.34
-0.05 -0.93%
Volume: 256.22M
Feb. 26, 2020 4:08p
P/E Ratio
5.39
Dividend Yield
5.33%
Market Cap
HK$1921.03 billion
Rev. per Employee
HK$3.03M
loading...
/zigman2/quotes/202401350/delayed
US : U.S.: OTC
$ 13.53
-0.16 -1.17%
Volume: 174,153
Feb. 25, 2020 3:59p
P/E Ratio
53.84
Dividend Yield
4.48%
Market Cap
$600.40 billion
Rev. per Employee
$387,287
loading...
/zigman2/quotes/202525815/delayed
CN : China: Shanghai
¥ 5.41
0.00 0.00%
Volume: 257.97M
Feb. 26, 2020 3:00p
P/E Ratio
6.22
Dividend Yield
4.63%
Market Cap
¥1928.16 billion
Rev. per Employee
¥2.53M
loading...
/zigman2/quotes/206628792/delayed
JP : Japan: Tokyo
¥ 3,708.00
-105.00 -2.75%
Volume: 2.56M
Feb. 26, 2020 3:00p
P/E Ratio
12.14
Dividend Yield
0.94%
Market Cap
¥1807.13 billion
Rev. per Employee
¥77.54M
loading...
/zigman2/quotes/205394574/delayed
JP : Japan: Tokyo
¥ 2,753.50
-68.00 -2.41%
Volume: 5.40M
Feb. 26, 2020 3:00p
P/E Ratio
16.00
Dividend Yield
1.60%
Market Cap
¥2753.96 billion
Rev. per Employee
¥101.67M
loading...
/zigman2/quotes/208297288/delayed
US : U.S.: OTC
$ 24.80
-1.95 -7.29%
Volume: 331.00
Feb. 25, 2020 3:29p
P/E Ratio
15.74
Dividend Yield
N/A
Market Cap
$24.21 billion
Rev. per Employee
$923,573
loading...
/zigman2/quotes/203281219/delayed
JP : Japan: Tokyo
¥ 1,158.00
+1.00 +0.09%
Volume: 3.59M
Feb. 26, 2020 3:00p
P/E Ratio
9.96
Dividend Yield
5.18%
Market Cap
¥439.92 billion
Rev. per Employee
¥34.15M
loading...
/zigman2/quotes/209396469/delayed
US : U.S.: OTC
$ 10.16
+0.0050 +0.05%
Volume: 93,327
Feb. 25, 2020 3:59p
P/E Ratio
9.55
Dividend Yield
3.87%
Market Cap
$3.99 billion
Rev. per Employee
$309,299
loading...
/zigman2/quotes/205375504/delayed
JP : Japan: Tokyo
¥ 2,861.00
-12.00 -0.42%
Volume: 842,900
Feb. 26, 2020 3:00p
P/E Ratio
11.62
Dividend Yield
3.01%
Market Cap
¥610.95 billion
Rev. per Employee
¥42.57M
loading...
/zigman2/quotes/202415695/delayed
US : U.S.: OTC
$ 51.08
-3.55 -6.50%
Volume: 325.00
Feb. 25, 2020 10:29a
P/E Ratio
11.33
Dividend Yield
2.62%
Market Cap
$5.55 billion
Rev. per Employee
$385,710
loading...
/zigman2/quotes/207666111/delayed
JP : Japan: Tokyo
¥ 3,912.00
+23.00 +0.59%
Volume: 3.27M
Feb. 26, 2020 3:00p
P/E Ratio
15.97
Dividend Yield
2.43%
Market Cap
¥3433.38 billion
Rev. per Employee
¥117.13M
loading...
/zigman2/quotes/210292336/delayed
US : U.S.: OTC
$ 17.24
+0.19 +1.11%
Volume: 99,391
Feb. 25, 2020 3:59p
P/E Ratio
15.86
Dividend Yield
1.79%
Market Cap
$31.18 billion
Rev. per Employee
$1.06M
loading...
/zigman2/quotes/203522406/delayed
JP : Japan: Tokyo
¥ 2,820.50
-24.50 -0.86%
Volume: 3.08M
Feb. 26, 2020 3:00p
P/E Ratio
15.31
Dividend Yield
5.11%
Market Cap
¥2181.59 billion
Rev. per Employee
¥95.93M
loading...
/zigman2/quotes/200526066/delayed
US : U.S.: OTC
$ 12.62
+0.12 +0.92%
Volume: 78,389
Feb. 25, 2020 3:59p
P/E Ratio
15.00
Dividend Yield
3.90%
Market Cap
$19.81 billion
Rev. per Employee
$868,462
loading...
/zigman2/quotes/204777714/delayed
JP : Japan: Tokyo
¥ 816.00
-20.00 -2.39%
Volume: 7.02M
Feb. 26, 2020 3:00p
P/E Ratio
8.74
Dividend Yield
4.29%
Market Cap
¥526.50 billion
Rev. per Employee
¥71.32M
loading...
/zigman2/quotes/206326885/delayed
US : U.S.: OTC
$ 3.63
-0.14 -3.71%
Volume: 311,306
Feb. 25, 2020 3:55p
P/E Ratio
9.04
Dividend Yield
3.03%
Market Cap
$4.78 billion
Rev. per Employee
$646,191
loading...
/zigman2/quotes/210560947/realtime/sampled
US : Tullett Prebon
0.6568
-0.0036 -0.5451%
Volume: 0.0000
Feb. 26, 2020 6:12a
loading...
/zigman2/quotes/203084975/delayed
AU : Australia: Sydney
$ 24.66
-0.42 -1.67%
Volume: 9.87M
Feb. 26, 2020 4:10p
P/E Ratio
13.02
Dividend Yield
7.06%
Market Cap
$90.42 billion
Rev. per Employee
$1.09M
loading...
/zigman2/quotes/206661702/composite
US : U.S.: NYSE
$ 16.10
-0.31 -1.89%
Volume: 793,401
Feb. 25, 2020 6:30p
P/E Ratio
12.09
Dividend Yield
7.41%
Market Cap
$58.04 billion
Rev. per Employee
$830,218
loading...
/zigman2/quotes/200638713/delayed
AU : Australia: Sydney
$ 85.35
-1.45 -1.67%
Volume: 3.36M
Feb. 26, 2020 4:10p
P/E Ratio
15.72
Dividend Yield
5.05%
Market Cap
$153.59 billion
Rev. per Employee
$919,022
loading...
/zigman2/quotes/207018701/delayed
US : U.S.: OTC
$ 56.78
+0.20 +0.35%
Volume: 200.00
Feb. 25, 2020 10:48a
P/E Ratio
15.09
Dividend Yield
N/A
Market Cap
$100.47 billion
Rev. per Employee
$687,071
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Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau. Follow him on Twitter @MktwKumar.

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