Sellers eager to cash out before a four-day holiday in China and buyers believed to be backed by Beijing staged a stock-market tug-of-war in Shanghai on Wednesday, leaving shares down slightly after a tumultuous trading session.
Deepening worries over China’s slowdown pushed down most markets elsewhere in the region, including the Australian dollar, which hit its lowest level in more than six years.
In Japan, the Nikkei 225 index docked 70.29 points, or 0.4%, to 18,095.40.
The Japanese yen briefly touched 120.46 against the U.S. dollar as the Nikkei turned to positive territory earlier in the day.
A weaker yen usually bodes well for Japanese exporters, who then pay lower costs at home.
In Hong Kong, the Hang Seng Index fell 250.49 points, or 1.2%, to 20,934.94,
The Australian dollar fell below $0.70 U.S. for the first time since 2009, after data out Wednesday showed the country’s economy grew by an annualized 2% in the second quarter, missing the 2.2% growth economists had expected.
The slowdown in the second quarter was due mainly to reduced mining and construction activity, coupled with a drop in the volume and value of commodities exports. The Australian economy is highly dependent on commodities exports to China and has been deeply affected by China’s slowing growth.
CHINA
In China, the CSI 300 regained 3.75 points, or 0.1%, to 3,365.83
The index staged two striking rebounds during the trading day, slumping into the negative in the afternoon, only to surge again in the final half-hour of trading.
Analysts said government funds were plowing cash into the market as Beijing attempts to cheer up domestic investors ahead of a national holiday on Thursday and Friday.
Despite a market down almost 40% from its June peak, China is focusing on its political image for now: Authorities will put on a military parade in the capital on Thursday to celebrate the 70th anniversary of the end of World War II.
Some 50 Chinese brokerage firms will channel over 100 billion yuan to a special account overseen by state-run China Securities Finance Corp. to invest in blue-chips, according to a Securities Times report Wednesday.
Reinforcing the report, more than a dozen of China’s leading securities firms—including Citic Securities, Huatai Securities and GF Securities—have issued a series of statements since Tuesday saying they would contribute 20% of their total assets to the new funding plan. Of those, Citic Securities will be the largest contributor with 5.4 billion yuan.
Still, the market struggled.
Investors appeared to want to take money off the table, before China’s markets closed on Thursday and Friday. Foreign investors sold stocks in Shanghai for the fourth straight day via a trading link with Hong Kong. The Shanghai Composite lost 2.2% over the week.
On Tuesday, China’s official manufacturing purchasing managers index for August fell to its lowest level in three years. South Korean exports, an indicator of the health of the global economy, fell 14.7% in August, amplifying investors’ gloom. This was the first evidence of a decline in regional trade since China devalued its currency on Aug. 11.
Other figures showed a contraction in exports in Japan.
In other markets
In Korea, the Kospi index inched up 0.99 points, or 0.1%, to 1,915.22
In Singapore, the Straits Times Index dropped 4.64 points, or 0.2%, to 2,878.13
In Taiwan, the Taiex index recovered 17.73 points, or 0.2%, to 8,035.29
The NZX 50 faltered 64.78 points, or 1.2%, to 5,509.21
The ASX 200 Index eked up 5.05 points, or 0.1%, to 5,101.46
