China’s stock markets plunged toward bear territory Friday, a sharp turnaround after a year of strong gains.
In Tokyo, the Nikkei 225 index staggered 65.25 points, or 0.3%, to 20,706.15,
In Hong Kong, the Hang Seng Index ditched 481.88 points, or 1.8%, to 26,663.87. Hong Kong is up around 13% this year, compared with Shanghai’s more-than-30% rise.
Elsewhere in Asia, stalled progress on Greece’s bailout talks added to investor uncertainty, while a slide in the price of crude oil pressured Australian shares.
Australia’s main index was down 1.5%, led down by the energy sector, after U.S. government data showed a surprise increase in inventories of refined fuels like gasoline. That led oil prices back below $60.00 U.s. a barrel late Thursday in New York.
Greece’s talks with its creditors appear likely to go down to the wire. European leaders have put off until the weekend talks to seal a bailout deal after cutting short talks in Brussels on Thursday to give negotiators more time to settle differences, including budget cuts and policy overhauls. Greece is just days away from defaulting on a €1.54-billion ($1.72 billion U.S.) loan payment
CHINA
In China, the CSI 300 dropped 370.32 points, or 7.9%, to 4,336.20, entering bear-market territory. The country’s startup stocks have lost a quarter of their value since hitting a record high earlier in the month.
Investors have started to question the longevity of that stimulus-driven rally, and analysts are sounding louder warnings that China’s market has reached unsustainable levels. A selloff over the past two weeks has taken a big bite out of earlier gains.
To be sure, China’s central bank has introduced new easing measures in the past couple of days: removing a cap on banks’ loan-to-deposit ratio and injecting cash into the financial system. Still, some investors fret that those steps don’t go far enough, and limit the likelihood of more potent measures, such as another cut to the amount of reserves banks are required to hold.
On Thursday, China’s central bank injected cash in to the financial system for the first time in 10 weeks, and a day earlier the State Council said it would remove a loan-to-deposit cap for banks, which has long limited the amount banks can lend. The central bank already has cut interest rates three times and the reserve-requirement ratio twice since late last year.
In other markets
The Taiex index in Taiwan faded 13.77 points, or 0.2%, to 9,462.57
In Korea, the Kospi index actually moved up 5.2 points, or 0.3%, to 2,090.26
In Singapore, the Straits Times Index docked 28.97 points, or 0.9%, to 3,320.90
The NZX 50 improved 22.15 points, or 0.4%, to 5,755.44
The ASX 200 Index slipped 86.83 points, or 1.5%, to 5,545.89
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