Asian markets weathered heavy losses on Tuesday as cautious investors took some profits off the table in light trading ahead of the holidays, with Chinese stocks falling hard in Shanghai and Hong Kong in spite of an interest-rate cut Monday by the People's Bank of China.
The benchmark Hang Seng Index closed down 401.6 points or 2.8% at 14,220.8.
Among market leaders, HSBC Holdings shed 0.5% and China Mobile plunged 1.9%. Property developers were mixed, with Sun Hung Kai Properties adding 0.4%, Cheung Kong tumbling 7.6% and Hopson Development plunging 10.0%.
Offshore oil producer CNOOC plummeted 4.6%, Sinopec fell 4.5% and PetroChina dropped 5.4%.
CHINA
The Chinese stock market closed sharply lower, extending its losses for the second straight trading session, as a lower-than-expected interest rate cut disappointed investors. The benchmark Shanghai Composite Index tumbled 4.6% or 90.53 points to close at 1,897.2. Stocks fell across the board, led by banks. The Shenzhen Composite Index of China's smaller second market fell 5.6% to 587.2.
China's central bank cut interest rates late Monday for the fifth time in four months in an effort to revive economic growth amid spreading job losses and worker protests. The People's Bank of China cut the benchmark one-year lending rate by 0.27 percentage point to its lowest level since February 2004.
Banks fell on concerns over the impact of lower interest rates on their profits. Industrial & Commercial bank of China fell 2.7% and Shanghai Pudong Development Bank shed 4.1%. Elsewhere in the financial sector, China Life Insurance lost 4.8% and Ping An Insurance plunged 6.0%.
Property developers finished lower, despite a cut in interest rate, as investors locked in profits from their recent advances. Poly Real Estate dropped 6.4% and China Vanke lost 4.9%.
Airlines also closed lower on profit taking. Air China sank 9.1%, China Eastern Airlines tumbled 8.4% and China Southern Airlines fell 7.8%. Index heavyweight PetroChina shed 4.6%.
Elsewhere:
Taiwan's Taiex plunged 2.9% to 4,405.
Indonesia's Jakarta Composite Index slipped 0.1% to 1,343.
Malaysia's KLCI closed down 2.3 points at 871.
Singapore's STI shed 1.2% to 1,144.
Australia's S&P/ASX 200 index ended 0.7% lower at 3,498.50.
In Wellington, the NZX 50 index gave up 0.7% to 2,661.74.
with files from other wire services
