Stocks in Asia mostly fell Tuesday, with China succumbing to another bout of volatility, as pressure from a wave of new initial public offerings spurred investors to sell down stakes in existing shares.
Elsewhere in Asia, major markets tracked losses in the U.S. after bailout talks between Greece and its European creditors broke down. Investors also will be parsing the Federal Reserve’s statements after its two-day meeting starting Tuesday for clues as to whether the U.S. economy is strong enough to withstand a rise in interest rates later this year.
In Tokyo, the Nikkei 225 index dropped 129.85 points, or 0.6%, to 20,257.94, its eighth loss in 11 days.
In Japan, the yen weakened against the U.S. dollar after the Bank of Japan Governor Haruhiko Kuroda backtracked on comments last week that signaled an end to the yen’s weakening path. The yen rose Tuesday afternoon to ¥123.81 against the U.S. dollar from around ¥123.35.
Kuroda’s comments last week spurred the dollar to fall 1.7% against the yen in a matter of hours when he said a measure of the Japanese yen’s relative value against other currencies was unlikely to weaken further.
In Hong Kong, the Hang Seng Index lost another 295.11 points, or 1.1%, to 26,566.70.
In Australia, indices finished flat, with Insurance Australia Group Ltd. rising 4.3% on news of an alliance with Warren Buffett’s Berkshire Hathaway Inc.
Minutes published earlier of the Reserve Bank of Australia’s policy meeting from June 2 said that there was broad agreement on the board’s "accommodative" policy stance, though further rate cuts don’t appear to be on the table for now. RBA Governor Glenn Stevens had said last week he was open to lowering rates further if needed.
CHINA
The Shanghai CSI 300 plummeted 156.44 points, or 3%, to 5,065.59
Analysts attributed the declines to pressure from new public offerings this week, for which investors were selling down stakes in existing listings. In addition, they said more investors are getting uncomfortable with valuations in the market, in particular for startup stocks fetching more than 100 times price to earnings.
Local investors have sold positions there in order to invest in cheaper blue chips and newly-listed companies, while data shows foreigners pulling out of the China market broadly recently.
The selling in China also follows a move by the China Securities Regulatory Commission last Friday to limit so-called margin financing, the practice of using borrowed money to make bets.
In other markets
In Korea, the Kospi index fell 13.60 points, or 0.7%, to 2,028.72
In Taiwan, the Taiex removed 46.70 points, or 0.5%, to 9,212.78
In Singapore, the Straits Times Index surrendered 25.04 points, or 0.8%, to 3,298.09
The NZX 50 fell 6.03 points, or 0.1%, to 5,813.93
The ASX 200 Index went south 2.97 points, or 0.1%, to 5,535.79.
