Chinese stocks closed at a 17-week low on Friday, as local money market rates hit a six-month high, while the rest of Asia was mixed as regional investors continued to digest the Fed’s decision to cut back its stimulus measures.
In Tokyo, the Nikkei 225 index inched higher 11.20 points, or 0.1%, to 15,870.42
The Nikkei gained on the strength of the dollar, which remained above the ¥104 mark, with the yen last trading at ¥104.44 compared with ¥104.23 late Thursday in New York. The Bank of Japan kept its monetary policy on hold Friday, saying that it expected the country’s economic recovery to continue, with some bumpy ground expected when a sales-tax rise is introduced next year.
Hong Kong’s Hang Seng Index tumbled 76.57 points, or 0.3%, to 22,812.18
Hong Kong was also in focus Friday, as investors reacted to two large deals in the city.
China Everbright Bank Co. lost 3.5% on its trading debut after raising $3 billion U.S. in Hong Kong’s largest 2013 initial public offering. The 11th-largest bank in China by assets priced its deal close to the middle of the price range, succeeding to list on its third attempt.
Shares in Australian network operator Telstra Corp. moved 1.8% higher in Sydney after it agreed to sell its Hong Kong-based mobile business to HKT Ltd. in a deal worth $2.4 billion U.S. Shares in HKT jumped 10.2%. The Australian firm’s exit from Hong Kong comes at a time when the highly competitive smartphone market is facing regulatory changes to increase competition.
More broadly across the region, investors in Asia were still digesting the Fed’s decision on Wednesday to start cutting its stimulus measures in January.
The start of this process — which has become known as ‘tapering’ — was long anticipated, and although Wall Street surged on the central bank’s decision, Asia had produced a more mixed performance when it reacted on Thursday.
At the end of the week, Asia’s developed markets were among the best performers, with Australia and Japan up 3.3% and 3%, respectively since last Friday.
CHINA
Shanghai’s CSI 300 index fell 54.27 points, or 2.3%, to 2,178.14, as a benchmark for interbank-borrowing rates hit 7.8%. Money-market rates have climbed sharply in recent days, and continued to rise on Friday even after the People’s Bank of China said it undertook short-term liquidity operations to offer an "appropriate" amount of funds to the money market Thursday.
Chinese stocks have been sensitive to changes in money-market rates after a cash crunch early in the summer and a sharp jump in corresponding interest rates sparked a hefty selloff in Shanghai and Hong Kong.
Large banks led the declines in Shanghai on Friday, indicating that investors felt the central-bank intervention was inadequate. China Citic Bank Corp. plunged 8.7%, while China Construction Bank Corp. ended down 6.2%.
In other markets;
Korea’s Kospi Index gained 7.70 points, or 0.4%, to 1,983.35
Taiwan’s Taiex Index cleared breakeven by 1.13 points to 8,408.53
The Singapore Straits Times Index added 24.25 points, or 0.8%, to 3,094.48
In New Zealand, the NZX 50 gave back 25.87 points, or 0.6%, to 4,681.19
In Australia, the S&P/ASX 200 zoomed 62.99 points, or 1.2%, to 5,265.22
