By V. Phani Kumar and Matthew Allen
HONG KONG (MarketWatch) -- Most Asian stock markets ended lower Wednesday, with liquidity concerns weighing on Chinese equities while resource shares got a boost as the falling U.S. dollar buttressed commodity prices.
The Shanghai Composite lost 1.9% to close at 2,842.72 on worries that a likely surge in new-share issues and prospects for lower bank lending in the remainder of the year will crimp liquidity.
Still, some analysts said they were confident that the government would step in to support the market if any correction went too far. Peter Lai, director at DBS Vickers, said that although Beijing wants to avoid asset bubbles, it doesn't want to "kill the market."
"If the Shanghai Composite went below 2,500, it's very likely that you would see some kind of liquidity-easing measures," he said.
Tracking the weakness in Shanghai, Hong Kong's Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.58% fell 0.5% and Taiwan's Taiex gave up 1.2%. South Korea's Kospi dropped 0.4% and India's Sensex slipped 0.1% in afternoon dealings.
Markets in Japan were closed for Autumnal Equinox Day, while Indonesia and Pakistan remained shuttered for religious holidays.
In the Philippines, shares ended up 2.1% earlier in the day, while more recently, Singapore's Straits Times Index trading flat as Thailand's SET Index added 0.5%.
On Wall Street, stock-index futures pointed to a flat open as investors awaited a decision from the Federal Reserve on U.S. interest rates. See Indications.
In Australia, stocks snapped a three-session losing streak and raced to their best finish in nearly a year on a strong rebound in banking and mining shares. Sydney's S&P/ASX 200 rose 1.5% -- more than it lost in the previous three sessions.
"I think the bears are getting extraordinarily frustrated, so up days are tending to be more exaggerated than down days," said Macquarie Private Wealth associate director David Halliday in Sydney. "It's hard to see anything in the short term that could derail the market."
Shares of Woodside Petroleum surged 5.1%, while mining giants Rio Tinto /zigman2/quotes/200083756/delayed AU:RIO +1.36% and BHP Billiton /zigman2/quotes/201448516/delayed AU:BHP +2.01% /zigman2/quotes/208108397/composite BHP +3.45% rose by 2.3% and 0.9%, respectively. The two miners have also been benefiting from target-price and profit-forecast upgrades from Citigroup, which raised its coking coal price forecast for next year to $200 per metric ton from a prior projection of $140 per ton.
Elsewhere, shares of Aluminum Corp. of China /zigman2/quotes/202960704/delayed HK:2600 +0.26% rose 0.5%, Sino Gold Mining /zigman2/quotes/209661600/delayed HK:1862 -1.00% added 0.3% and PetroChina Co. /zigman2/quotes/204979431/delayed HK:857 +7.83% added 0.1% in Hong Kong. Korea Zinc finished up 1.1%, with Sterlite Industries (India) gaining 2.6% in afternoon trading.
Sinopharm's IPO goes well
In Hong Kong, debutante Sinopharm Group /zigman2/quotes/203219095/delayed HK:1099 -0.64% opened up 21% at HK$19.40 compared with the shares' HK$16 initial public offering price. Sinopharm finished the day at HK$18.52 in heavy trading.
Also making big gains, shares of Geely Automobile Holdings /zigman2/quotes/200716015/delayed HK:175 +0.20% /zigman2/quotes/205261343/delayed GELYF +0.20% jumped 19% in Hong Kong as trading resumed following news a Goldman Sachs affiliate would take a stake in the company via convertible bonds and warrants.
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