Shanghai stocks sank on Tuesday, in the market’s second-worst percentage decline of the year, with steep declines for banks, energy firms and construction companies.
Markets in Japan were closed.
In Hong Kong, the Hang Seng index backtracked 74.88 points, or 0.3%, 23,333.69,
CHINA
Shanghai’s CSI 300 index backtracked 69.56 points, or 2.1%, to 3,324.92.
There was no single catalyst for Tuesday’s trading in Shanghai, but rather a combination of factors. In particular, liquidity remains tight, with interbank rates remaining high, while initial public offerings have also made cash scarcer.
In addition, news of a probe into possible stock-price manipulation has dampened sentiment, especially among smaller, private companies. Among large companies, there was also some heavy selling in sectors that have been subject to frenzied buying in recent sessions.
The mainland stock market has been on a wild ride over the past few weeks, with the market rising 22% since China made a surprise cut to interest rates late last month. Gains and losses have been exaggerated, with the same period seeing six sessions that finished with a more than 2% gain or a loss.
Large banks experienced sharp falls on Tuesday after surging a day earlier on expectations for further easing in monetary policy. Bank of Communications sank 5.2%, and Agricultural Bank of China lost 5.6%.
The market was also weighed by large energy companies, as oil firms PetroChina and China Petroleum & Chemical were down 5.6% and 5%, respectively.
Companies that were buoyed by news at the end of last week that China would start work on seven million new affordable homes in 2015 were also caught up in the rout. Metallurgical Corp. of China dropped 6.3%, and Sany Heavy Industry lost 6.1%.
In other markets;
Singapore's Straits Times Index inched up 1.55 points, or 0.1%, to 3,332.51
The Taiex index in Taiwan gained 2.71 points to 9,097.71
Korea’s Kospi index moved lower 4.10 points, or 0.2%, to 1,939.02
New Zealand’s Exchange 50 gained 10.36 points, or 0.2%, to 5,552.10
Australia’s S&P/ASX 200 faded 61.03 points, or 1.1%, to 5,380.92
