A swift, steep drop in China shares flipped to gains Wednesday, the latest signal that Beijing won’t let the market fall too sharply before engineering a rescue.
In Japan, the Nikkei 225 index dumped 331.84 points, or 1.6%, to 20,222.63
In Hong Kong, the Hang Seng Index collapsed 307.12 points, or 1.3%, to 23,167.85, which has wiped out all year-to-date gains. The index fell 1.3% Wednesday, while a gauge of Chinese companies listed in the city lost 1.2%.
Japan’s latest economic data signals the growing reach of a slowdown in China, which accounts for about a fifth of Japan’s exports and imports. On Wednesday, Japan reported a monthly deficit in July of ¥268.1 billion ($2.15 billion U.S.), the fourth straight month of shortfall, after exports rose 7.6% on year but imports fell 3.2%.
CHINA
In China, the CSI 300 regained 60.72 points, or 1.6%, to 3,886.14
The U-turn came after a handful of companies disclosed their biggest shareholders, some of which included state-backed firms. Analysts say that gave investors a sense of security in Beijing’s market role.
Afternoon rallies aren’t uncommon, as investors who anticipate Beijing might step in during the final minutes of trading ramp up buying to ride the gains.
In a company filing midday on Wednesday, Dongxu Optoelectronic Technology, disclosed that its third- and fourth-largest shareholders as of August 14 were China Securities Finance Corp., the state-run firm tasked with propping up the market, and Central Huijin Investment, the domestic investment arm of China’s sovereign-wealth fund. Stock of the company, which manufacturers electronic-accessory components, hit its upward daily limit of 10%.
Also Wednesday, Zhefu Holding Group, which manufacturers turbine generators, disclosed that Central Huijin is the company’s biggest shareholder, according to a filing on the Shenzhen stock exchange. Its shares also limited up.
While not all companies counting state-backed firms among their biggest shareholders gained Wednesday, the announcements offered enough of a confidence boost to spill into the broader market.
Some 173 stocks reached their upward daily limited Wednesday, with just nine falling to their downward limit on the Shanghai and Shenzhen exchanges, according to Wind Information Co.
In other markets
In Korea, the Kospi index shed 16.68 points, or 0.9%, to 1,939.38
In Singapore, the Straits Times Index lost 8.4 points, or 0.3%, to 3,041.25
In Taiwan, the Taiex index plummeted 155.38 points, or 1.9%, to 8,021.84
The NZX 50 added 40.52 points, or 0.7%, to 5,751.29
The ASX 200 Index recovered 77.04 points, or 1.5%, to 5,380.19
