Chinese stocks plummeted to lead Asian equities lower Monday, with concerns that Beijing may be reluctant to ease a liquidity crunch in the Shanghai interbank money markets slamming banks particularly hard.
In Japan, the Nikkei 225 dropped 167.35 points, or 1.3%, to 13,062.78
Hong Kong’s Hang Seng Index swooned 449.23 points, or 2.2%, to 19.813.98
Japanese stocks had risen sharply earlier in the day as the yen extended its decline and on news the ruling party had won a sweeping victory in Tokyo metropolitan assembly elections.
A drop in shares of some retailers and exporters weighed the broader market. Seven & I Holdings Co. fell 1.3%, Nissan Motor Co. lost 3.4%, and Honda Motor Co. dropped 2.2%.
Bucking the trend, shares of Softbank Corp. climbed 0.7%, extending strong recent gains after Dish Network Corp. last week withdrew a rival bid to acquire U.S. telecommunications firm Sprint Nextel Corp.
In Sydney, a number of miners’ shares dropped as a firming U.S. dollar weakened the outlook for commodities.
Newcrest Mining Ltd. slumped 7.9% after gold futures skidded nearly $100 U.S. an ounce last week.
Concerns about China’s economic-growth trajectory also weighed on the sector, with BHP Billiton Ltd. dropping 3.4%, and Fortescue Metals Group Ltd. losing 4.3%.
Shares of AMP Ltd. plunged 12.9% in strong volume after the company issued a warning on its first-half profit due to rising life-insurance claims.
CHINA
The Shanghai Shenzhen CSI 300 fell 146.18 points, or 6.3%, to 2,171.21
Short-term interbank interest rates in Shanghai, which hit record highs on Thursday, further extended their drop from those levels but stayed above the 6% level Monday, according to Dow Jones Newswires.
Small- and medium-sized Chinese lenders suffered the most. Shares of China Minsheng Banking Corp. plunged by the day’s 10% limit, China Merchants Bank Co. skidded 6.7% and Shanghai Pudong Development Bank Co. slumped 9.2%.
In Shenzhen, Ping An Bank Co. dropped by the 10% daily limit, and Bank of Ningbo Co. shed 9.9%, while the Hong Kong-listed shares of China Minsheng and China Merchants Bank lost 8% and 4.6%, respectively.
Worries about high interbank rates have surfaced at a time when several brokerages have downgraded their outlook for the Chinese economy. Goldman Sachs on Monday cut China’s economic growth forecast to 7.4% for 2013 and to 7.7% for 2014.
In other markets;
Taiwan’s Taiex Index dumped 35.28 points, or 0.5%, to 7,858.03
Singapore’s Straits Times Index dipped 50.14 points, or 1.6%, to 3,074.31
Korea’s Kospi Index slid 23.82 points, or 1.3%, to 1,799.01
In New Zealand, the Exchange 50 Gross Index eked up 0.98 points to 4,364.05
In Australia, the S&P/ASX 200 skidded 69.66 points, or 1.5%, to 4,669.15
