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March 3, 2015, 4:24 a.m. EST

Chinese stocks fall as liquidity concerns emerge

Asian markets mostly close lower

By Laura He, MarketWatch

Reuters Enlarge Image
Hong Kong and Shanghai stocks tumble on Tuesday, with other Asian markets mostly lower.

HONG KONG (MarketWatch) — Hong Kong and Shanghai stocks both pulled back on Tuesday, as investors worried that the Chinese securities regulator’s approvals of 24 initial public offerings might drain liquidity from mainland markets and dampen stocks.

The Hang Seng Index (HONG:HK:HSI)  fell 0.7%, while the Hang Seng China Enterprises (HONG:CN:160462) , which tracks Hong Kong-listed mainland Chinese companies, declined 2.2%.

Over on the mainland, the Shanghai Composite Index (SHG:CN:SHCOMP)  lost 2.2%.

The China Securities Regulatory Commission, the nation’s top securities regulator, announced late Monday that it had just approved the IPO plans of 24 companies. Of those, 12 would be listed on the Shanghai Stock Exchange, while the rest would go to Shenzhen markets.

Major mainland banks and property developers posted heavy losses in both Hong Kong and Shanghai.

Among top underperformers, Bank of China Ltd. (HKG:HK:3988)   (SHG:CN:601988)  lost 2.2% in Hong Kong, while tumbling 3.4% in Shanghai. Meanwhile, the H-shares of Industrial and Commercial Bank of China Ltd. (HKG:HK:1398)   (SHG:CN:601398)  declined 1.8%, as its Shanghai-listed shares, or A-shares, slid 3.7%. Leading Chinese developer Poly Property Group Co. Ltd. (HKG:HK:119)  skidded 4.8% in Hong Kong markets, and its Shanghai-traded Poly Real Estate Group Co., Ltd. (SHG:CN:600048)  sank 5.6%.

Other Asian markets were also mostly lower. Japan’s Nikkei Average (NIKKEI:JP:NIK)  dipped 0.1%, but the broader Topix (TOKYO:JP:180460)  inched up 0.1%. The yen (XTUP:USDJPY)  strengthened against the dollar to ¥119.76, from ¥119.96 at the previous stock close.

Sydney stocks also settled lower, with the S&P/ASX 200 (S&P:AU:XJO)  down 0.4%. However, Seoul shares bucked the weak regional trend, as the Kospi Composite Index (KOREA:KR:180721)  edged up 0.2%.

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