Asian stock markets were lower Monday, weighed by Wall Street's losses Friday, while Australian miners were hit by plans for a new tax on the resources industry.
Japanese markets had the day off
In Hong Kong, the Hang Seng index tumbled 297.23 points, or 1.4%, to 20,811.36
Property and bank stocks were down in Hong Kong after China announced over the weekend that it is ordering banks to raise the amount of money they hold in reserves for the third time this year, aimed at damping inflation pressures.
The Sydney market was focused on the government's unveiling of a broad-based tax overhaul announced Sunday. Canberra planned to pull in more in tax from the country's booming resources industry and use the extra revenue to cut company taxes to a more globally-competitive level while offering more generous tax concessions for smaller firms.
Australia's mining giants BHP Billiton and Rio Tinto were down 3.0% and 3.5%, respectively.
The two companies would be hit hard by the planned resource tax, as they have the most profitable tier-1 Australian projects, said Credit Suisse. "Overall, the Resource Super Profits Tax will mean earnings and valuation reductions; we expect the forthcoming consultation period with the government will be intense and can only hope for some watering down provisions."
Other resource stocks were also battered with Centennial Coal down 5.1%, Energy Resources of Australia down 6.1% and Newcrest Mining down 2.9%.
Investors in the region were also cautious after China's announcement Sunday that it would raise banks' reserve requirement ratio by 50 basis points, from May 10, to cool property prices.
Goldman Sachs said in a note the hike had limited direct impact on banks' ability to lend as the excess reserve ratio was likely still around 2.0%.
Mainland property and bank stocks in Hong Kong were hit by news of the hike. Among the decliners, China Overseas Land was off 3.4%, China Resources Land fell 4.8%, Bank of China was 1.5% lower and China Construction Bank slipped 1.7%.
In Seoul, technology stocks were leading the market lower as they tracked falls in their U.S. peers Friday.
Samsung Electronics was down 1.9% and Hynix Semiconductor lost 2.8%. LG Display shed 1.4% after Taiwan's AU Optronics said Sunday a U.S. court had cleared the company from patent infringement claims by LG Display, and further concluded that LG Display had in turn infringed on four of AU Optronics' patents, in a case that started in 2006 and went to trial in June 2009.
In Taiwan, AU Optronics was up 0.3% on the news in a broadly lower market.
Mediatek gained 0.4% after reporting Friday that first quarter net profit rose 59% on-year to NT$11.13 billion. Analysts attributed the robust gains to growing demand for handset chips from China and other emerging markets.
Elsewhere in the region, Taiwan's Taiex was down 0.9%, Singapore's Straits Times Index fell 0.8%, Malaysia's Kuala Lumpur Composite Index was flat, Indonesia shares were flat and Philippine shares lost 0.2%.
In foreign exchange markets, the euro was down after rising in early trade on the weekend's news that the euro zone and the International Monetary Fund had reached a deal for a three-year, EUR110 billion bailout for Greece.
The euro was at $1.3217 against the U.S. dollar, from $1.3312 U.S. in late New York trade Friday and at Y124.13 against the yen, from Y125.02. the dollar was at Y93.87 from Y94.01.
Elsewhere;
Chinese markets had the day off
Korea’s Kospi index let go of 20.35 points, or 1.2%, to 1,721.21
Singapore’s Straits Times Index moved lower 30.39 points, or 1%, to 2,944.22
Taiwan’s Taiex index shed 52.08 points, or 0.7%, to 7,952.17
New Zealand’s NZX 50 Index fell 5.77 points, or 0.2%, to 3,280.35
Australia’s S&P/ASX 200 slid 21.90 points, or 0.5%, to 4,785.50
