Shanghai ended lower Friday, but capped its third-straight week of gains, while the rest of Asia struggled to shake off a bout of weakness pegged to disappointing earnings in the U.S.
In Japan, the Nikkei 225 index dropped 139.42 points, or 0.7%, to 20,544.53
In Hong Kong, the Hang Seng Index staggered 270.34, or 1.1%, to 25,128.51
Australia’s index, led by losses in the mining sector, shed 1.8% for the week.
Shares in the region are struggling to shine against Chinese equities. The MSCI Asia Pacific index which began to plateau out around late April, was up 8.8% year-to-date through Thursday’s close. That compares with the Shanghai Composite’s gain of nearly 29%.
A slide in Asia-Pacific currencies accelerated Friday, as fresh signs of a deepening slowdown in China emerged. The Australian dollar fell to its weakest level against the U.S. dollar in six years. Friday’s moves add to existing pressure to regional currencies, as expectations the Federal Reserve will raise short-term interest rates have strengthened the dollar.
CHINA
In China, the CSI 300 subtracted 74.53 points, or 1.8%, to 4,176.28
Some analysts say investors took the chance to cash in on gains, after the market rose earlier Friday. China’s securities regulators tend to release policies over the weekend, which could add to market uncertainty.
A lackluster early reading of China’s factory activity, which hit a 15-month low, could suggest that Beijing will cut interest rates further in the second half of the year, a potential boost to the market
The preliminary Caixin manufacturing purchasing managers index fell to 48.2 in July compared with a final reading of 49.4 in June. A reading below 50 indicates contraction.
The week’s gains come as the Chinese government stands by its commitment to prop up the market. The central bank continues to pump money into stocks through a regulator-owned fund, China Securities Financial Corp., which helps brokerages finance loans for stock buying.
Many analysts are expecting the Shanghai market eventually to reach 4500, if not in the immediate-term. Earlier this month, some 21 brokerages promised to support the market as long as long as it stays below that level.
Margin trading, a main factor behind Shanghai’s volatile rise and fall, has fallen 36% from 1.5 trillion yuan as of Thursday, from a record 2.3 trillion on June 18, according to Wind Information Co.
In other markets
Singapore’s Straits Times Index dipped 3.72 points, or 0.1%, to 3,352.62
In Taiwan, the Taiex index plummeted 127.58 points, or 1.4%, to 8,791.12
In Korea, the Kospi index moved down 19.11 points, or 0.9%, to 2,045.96
The NZX 50 lost 7.12 points, or 0.1%, to 5,894.18
The ASX 200 Index moved lower 24.18 points, or 0.4%, to 5,566.10
