Hong Kong: Asian shares fell, with Chinese stocks leading the decline, while the euro slipped and the yen gained broadly as investors sought clarity about talks on financial aid for Greece.
Shanghai stocks retreated to their lowest in more than six months, slumping 2%, as investors dumped banking stocks including China Construction Bank (CCB) on concern over fundraising plans. Hong Kong shares shed 1.5%.
“One of the reasons for today’s big fall is the fundraising,” said Wen Lijun, analyst at Nanjing Securities. “Concern over adjustments to the property market are also weighing in the background,” she said.
Reversing gains: An investor looks at the stock price monitor at a private securities company in Shanghai. China's shares fell on Tuesday
On Monday, Caijing magazine reported that CCB may discuss a plan at a board meeting on Thursday to raise up to 70 billion yuan ($10.25 billion) through a share issue in Shanghai and Hong Kong, shaking confidence in banking stocks.
Nearly all 14 banks listed on the Shanghai and Shenzhen stock exchanges fell, with Industrial and Commercial Bank of China, the third-most actively traded stock, down 1.6%. CCB lost 0.8%.
Minsheng Bank and Merchants Bank were also on the list of the day’s 10 most active stocks, with both falling 2%.
Property sector heavyweight China Vanke, the second-most actively traded share on the Shenzhen market, fell more than a per cent even after announcing a nearly 50% rise in first-quarter net profit.
Recent government moves to rein in speculation in the property sector prompted the index’s large falls starting last week, knocking real estate and banking shares.
China’s key stock index has fallen 11% so far this year, reversing an 80% gain in 2009.
“There’s a lot of negative news in the market now and this has driven the market to new lows,” said Chen Shaodan, analyst at Stockfly Securities in Beijing.
The MSCI Asia Pacific index of stocks outside Japan was down about 0.7%. The index, however, is still up more than 3% this year.
Japan’s Nikkei stock average inched up 0.4%, with investors picking up stocks with improved earnings outlook.
IHI Corp. surged 9% after it beat expectations by lifting its net profit estimate for the past financial year.
“Having a company like this show such solid profits is quite encouraging to others in the market,” said Masayoshi Okamoto, head of dealing at Jujiya Securities.
Shares in South Korea, Taiwan, India and Singapore fell less than half a per cent.
The low-yielding yen rose broadly, as concerns about euro zone debt problems triggered general risk aversion, which often benefits the Japanese currency.
Markets awaited details of financial aid in paying its debts Athens is seeking from the euro zone and the International Monetary Fund. Germany said on Monday it stood ready to commit funds, but demanded Athens take painful austerity measures.
Analysts said other euro zone countries also faced credit risks, highlighting recent rises in the cost of insuring debt in Portugal and Spain. REUTERS
Anirban Nag in Sydney contributed to this story.