Chinese markets fell sharply Wednesday, even as officials scrambled to arrest a three-week stock selloff.
In Tokyo, the Nikkei 225 index dumped 638.95 points, or 3.1%, to 19,737.64, its sharpest percentage loss since March 2014
In Hong Kong, the Hang Seng Index collapsed another 1,458.75, or 5.8%, to 23,516.56, wiping out all of its gains for the year
A gauge of Chinese companies with Hong Kong listings, known as H-shares, plunged 6.1%.
The Australian dollar weakened the most of any currency in Asia, falling 0.8% against its U.S. counterpart, as the commodity selloff intensifies.
Meanwhile, euro-zone leaders set a Sunday deadline for Greece to come up with a new set of more stringent measures to avoid defaulting on the European Central Bank and exiting the currency union.
CHINA
The widespread selling has spilled into global markets and is deepening doubts about Beijing’s limits to halt it.
In China, the CSI 300 let go of 264.96 points, or 6.8%, to 3,663.04
China has introduced fresh measures to restore investor confidence seemingly to little avail. Stocks and Chinese bonds traded offshore, even high-quality corporate bonds issued by top state-owned companies, are getting dumped.
China’s yuan, freely traded in the offshore market, hit a four-month low against the U.S. dollar amid a dimming outlook for the world’s second-largest economy.
Hundreds of Chinese stocks were frozen from trading Wednesday, with 1,287 companies halted. That represents 45.6% of the constituent stocks of the Shanghai Composite and Shenzhen Composite and $2.5 trillion of market capitalization, according to data from FactSet.
China has put an arsenal of measures to work in recent days to stem the selloff that has wiped out roughly $2.4 trillion U.S. in value from China’s equities. On Wednesday, the China Securities Regulatory Commission announced that the China Securities Finance Corp., a commission unit that provides financing for margin trading, will increase purchases of small-cap stocks. The move follows an earlier pledge by the company to buy blue-chip shares to stabilize the market. China’s central bank said it would help ensure the unit has ample liquidity to stabilize the market.
Investors’ shaken confidence also has dented the Chinese yuan. In the onshore market, the Chinese yuan hit 6.2094 per U.S. dollar, compared with 6.2100 as the market closed Tuesday. The price for the yuan in the offshore market where it can trade freely, fell to as low as 6.2290 per dollar — the weakest level since March 18 — compared with 6.2212 late Tuesday. China’s central bank fixed the yuan’s official rate for Wednesday at 6.1175 a dollar, a touch weaker than 6.1175 Tuesday.
Over the weekend, Beijing suspended initial public offerings and made it easier for investors to borrow to buy stocks. China’s brokers also vowed to buy shares until the Shanghai Composite hits the 4,500 level. Despite the recent rout, China’s main stock index is up 72% over the past year and 10% since January.
Still, concerns are brewing that Beijing’s increasingly desperate measures to calm markets are building bigger risks into the country’s financial system.
Worries about China’s faltering demand amid the stock slide are also driving down commodity markets, with copper up 0.1% after hitting a six-year low on Tuesday.
China is the world’s top copper consumer, accounting for about 40% of global consumption. Pessimism about China, coupled with worries about a supply glut, also sent oil prices to a near three-month low.
In other markets
The Taiex index in Taiwan subtracted 274.05 points, or 3%, to 8,976.11
In Korea, the Kospi index skidded 24.08 points, or 1.2%, to 2,016.21
In Singapore, the Straits Times Index sifted off 55.94 points, or 1.7%, to 3,284.99
The NZX 50 slipped 35.47 points, or 0.6%, to 5,767.70
The ASX 200 Index shed 111.89 points, or 2%, to 5,469.53
