Bangkok: Most Asian markets fell on Thursday after the overnight decline in US stocks, and as possible economic tightening measures in China pulled stocks down there, as well as in Hong Kong and South Korea.
Shares lost ground in Australia, Singapore and Taiwan.
Japanese stocks were mixed as bargain-hunting in recent decliners tapered off.
The Nikkei 225 index fell 0.7% to 15,396.30. The broader Topix index rose 0.1% to 1,498.86. Analysts say that after the Nikkei’s recent eight-day losing streak, the index’s momentum has shifted upwards. But investors aren’t chasing prices higher quite yet.
A screen shows the stock index at a brokerage in Hong Kong on Wednesday when an overnight rally on Wall Street boosted investor confidence. The Hang Seng Index fell 1.4% on Thursday
Toyota Motor Corp. fell 0.3%.Matsushita Electric Industrial Co. Ltd lost 0.7%. And Bridgestone Corp. lost 2.1% as it came under pressure from a rebound in oil prices. Trading houses and resource shares, though, were higher after crude oil futures rose nearly$3 (Rs117.9) a barrel to $94.09 in New York overnight. Shell Plc. gained 2.1%, and Mitsui & Co. rose 2.2%.
Meanwhile, expectations of further tightening measures pulled the major indices down in Hong Kong, Shanghai and Shenzhen. China has continued to boom and inflation rise despite earlier measures to control the economy, and investors expect the centralbank to hike interest rates for the sixth time this year as early as Friday.
The cabinet said on Wednesday it will take further steps to ensure basic price stability and guarantee supplies of food, domestic consumer products and industrial products.
The blue chip Hang Seng Index fell 1.4% to 28,751.2.
“Investors are taking a cautious stance on concerns over the US market’s volatility and the possibility of another round of tightening measures in China coming soon,” said Ben Kwong, chief operating officer of KGI Asia Ltd.
Hong Kong property firms led the declines. Henderson Land Development Co. Ltd tumbled 4.3% to HK$68.75.
In China, the benchmark Shanghai Composite Index fell 0.9%, and the Shenzhen Composite Index fell 1.4%. “Although interest rate hikes are expected to have a psychological—instead of practical —impact, when the market is under correction, any piece of slightly negative news can disturb emotionally fragile investors,” said Tang Xiaosheng, an analyst at Guosen Securities. Energy stocks, which had rallied earlier this week, were the biggest losers. PetroChina Co. Ltd fell 2.5%. China Shenhua Energy Co. Ltd dropped 4.2%. In Tokyo, the dollar was trading at 111.35 a yen—down from 111.57 per yen on Wednesday in New York. The euro rose to $1.46, from $1.46.
Thailand’s main stock index fell 0.7% to 855.5 in light volume. Indonesian shares rose as foreign investors bought resource and mining blue chips on expectations of strong 2007 earnings. The main index rose 0.5% to 2,705.8.
Malaysia’s Kuala Lumpur Composite index gained 0.4%, to 1,390, buoyed by local funds buying government-linked companies. Stocks in the Philippines declined, giving back some of the previous session’s gains after the overnight retreat on Wall Street. The Philippine Stock Exchange Index fell 0.3 %, to 3,672.2. The index rose 2.3% on Wednesday.
South Korean shares were pulled lower by China-linked shares, which declined sharply on rising concerns that Beijing may try to cool the country’s fast growing economy. The Korea Composite Stock Price Index (Kospi), erased early gains to end down 1.3% at 1,947.7.
Singapore shares fell, tracking similar drops in the region, as investors remained jittery over losses in the US financial and mortgage markets. The Straits Times Index dropped 1.3% to 3,477.6. Concerns over the renewed slide in US stocks undermined the Australian share market. The benchmark S&P/ASX 200 fell 1.1% to 6,528.6. Taiwanese shares fell in weak volume after the overnight decline on Wall Street. The Weighted Price Index of the Taiwan Stock Exchange shed 0.4% to finish at 8,905.4.