Chinese shares slumped to lead Asian markets lower on Monday as concerns that Beijing may use monetary policy tools to restrict bank lending triggered a selloff in real estate and financial stocks.
Shanghai’s CSI 300 Index chopped 117.51 points, or 3.8%, to 2,974.35
The fall in Shanghai and elsewhere came after the People’s Bank of China Friday raised banks’ required reserve ratio for the seventh time since the beginning of 2009 — by half a percentage point.
Investors were also wary because U.S. markets will be shut Monday for the Martin Luther King, Jr. Day holiday.
Leading the decliners on mainland bourses, shares of Poly Real Estate Group Co. crumbled 8.7% and China Vanke Co. shed 7%. Qingdao Haier Co. was down 9%, China Oilfield Services fell 8% and Cosco Shipping Co. was down 6.3%.
China Everbright Bank shed 5.3%, China Construction Bank lost 4.1% and Industrial & Commercial Bank of China fell 2.8% amid concerns the PBOC might increasingly use the reserve ratio as a tool to adjust banks’ pace of lending. In Hong Kong, the three banks fell 1.9%, 2.1% and 1.3%, respectively.
Japan’s Nikkei 225 Index inched ahead 3.82 points to 10,502.90
Hong Kong’s Hang Seng Index subtracted 126.26 points, or 0.5%, to 24,157.
In Tokyo, construction-machinery makers linked to Chinese demand were also dragged down by Beijing’s reserve-requirement ratio hike Friday.
Komatsu fell 1% and Hitachi Construction Machinery slid 1.3%.
In Sydney, weakness in mining stocks offset strength in the consumer-staples sector, though trading was quiet due to the long weekend in the U.S.
BHP Billiton fell 1.2% and Newcrest Mining shed 1.3%, while Woolworths gained 0.5% and Wesfarmers added 0.2%.
Gloucester Coal jumped 4.1% to $13.60 Australian dollars ($13.44 U.S.), up sharply from A$10.16 on Dec. 3, when Bowen Basin coal miners declared force majeure.
In Seoul, the technology sector was lifted by investor optimism over the U.S. economic recovery and demand for electronic goods after U.S. retail-sales data showed a slight increase in December. Samsung Electronics rose 1.7% and LG Electronics gained 1.3%.
However, car and chemical makers declined on profit taking, with Hyundai Motor dropping 1.3% and LG Chem shedding 1.7%.
Taiwanese construction stocks fell on concern the government may launch more measures to cool the property market. Taiwan’s central bank lowered the loan-to-value ratio for mortgages on second homes to 60% from 70% after raising interest rates at its Dec. 30 policy meeting.
Cathay Real Estate Development dropped 3.3%.
In foreign-exchange markets, the euro fell against the U.S. dollar and the Japanese yen. Trade was subdued with many investors sidelined because U.S. markets were shut Monday, and many were looking to the euro-zone finance ministers’ meeting as well as Chinese economic data this week for cues.
The euro was at $1.3295 U.S. compared with $1.3387 U.S. in late New York trade Friday, and at ¥110.19, compared with ¥110.95. The dollar was at ¥82.87 from ¥82.85.
In other markets
Korea’s Kospi Index slid 8.32 points, or 0.4%, to 2,099.85
Taiwan’s Taiex Index stepped back 47.42 points, or 0.5% to 8,925.09
Singapore’s Straits Times Index faded 7.33 points, or 0.2%, to 3,238.63
New Zealand’s NZX 50 dipped 15.59 points, or 0.5%, to 3,354.30
Australia’s S&P/ASX 200 Index swooned 38.40 points, or 0.8%, to 4,763.10
