China shares ended higher Tuesday after officials announced fresh steps to rein in short selling, while commodities weakness spread to some Asian currencies
In Japan, the Nikkei 225 index faltered 27.75 points, or 0.1%, to 20,520.36,
In Hong Kong, the Hang Seng Index lost 5.3 points to 24,406.12, while a gauge of Chinese companies listed in the city is up 0.5%.
Meanwhile, a continued slide in commodities — from oil to gold and copper — has pressured some Asian currencies.
The Singaporean dollar hit its weakest level in four-and-a-half months.
In Australia, the central bank kept its cash rate steady at a record low 2.0% Tuesday, but kept the door open for rate cuts later this year. A protracted commodities slump has pressured Australia’s resources-dependent economy, and non-mining investment continues to lag.
The Australian dollar strengthened after the announcement, last at $0.7374 U.S., compared with $0.7286 U.S. earlier Tuesday, after the central bank said the local dollar is adjusting to weaker commodity prices. Earlier, Governor Glenn Stevens had warned the Aussie should and would weaken further. The currency has recent fallen to a six-year low.
CHINA
In China, the CSI 300 prospered 118.92 points, or 3.1%, to 3,948.16
Chinese regulators are continuing to roll out rescue measures to stem a 27% decline in equities since mid-June.
Late Monday, the Shanghai and Shenzhen stock exchanges announced revised rules on short selling to curb volatility, according to statements published on their official websites. But analysts question the effectiveness of the move given the limited scope of short selling in China’s market.
Under new rules, short sellers must wait at least one day to cover their positions and pay back loans used to buy shares. Previously, investors could cover their positions within the same day, a practice regulators said added to “abnormal volatility of stock prices.”
Short selling allows investors to sell borrowed shares on the belief they can buy them back at a much lower price later on, pocketing the difference. It remains a small portion of China’s debt-fueled stock investing, or margin loans, making up just 3.48 billion yuan ($560.28 million) as of Monday, compared with 1.29 trillion yuan of margin-financing loans, according to Wind Information Co.
On Tuesday, Citic Securities Co., China’s largest brokerage firm by assets, and Huatai Securities Co., China’s fourth-largest broker, temporarily suspended their short-selling businesses, effective immediately, according to separate company statements.
The announcements follow Chinese regulators’ deepened scrutiny of automated trading in recent days. A total of 38 trading accounts on the Shanghai and Shenzhen Stock Exchange have been frozen as of Monday over trading irregularities, including one account managed by U.S.-based hedge fund firm Citadel Securities.
In other markets
Singapore’s Straits Times Index eased back 1.75 points, or 0.1%, to 3,191.04
In Taiwan, the Taiex index slid 13.55 points, or 0.2%, to 8,510.86
In Korea, the Kospi index gained 19.5 points, or 1%, to 2,027.99
The NZX 50 subtracted 24.10 points, or 0.4%, to 5,937.75
The ASX 200 Index added 18.56 points, or 0.3%, to 5,697.90
