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.
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 (ICBC), 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 percent 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. The stock has gained 17% over the two days since news emerged about a joint venture with Toshiba Corp.
“Having a company like this shows such solid profits are quite encouraging to others in the market,” said Masayoshi Okamoto, head of dealing at Jujiya Securities.
Sharp Corp, the world’s No. 4 LCD TV maker, announced results after the market closed, saying that it has swung to a quarterly profit on robust sales of display and solar panels. The firm forecast more than a twofold jump in annual operating profit to its highest in three years, beating market expectations.
Sharp finished up 2% on the day.
Australian stocks gave up early gains to end flat, with banks leading the retreat ahead of a reporting season kicking off on Thursday with no.4 lender Australia and New Zealand Banking Group.
Shares in South Korea, Taiwan, India and Singapore fell less than half a percent.
The low-yielding yen rose broadly, as concerns about euro zone debt problems triggered general risk aversion, which often benefits the Japanese currency.
The Australian and Canadian dollars retreated from 19-month highs set against the yen on Monday, while the dollar slipped.
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.
Gold softened a touch but held above $1,150 an ounce as investment demand due to concern over sovereign risk in the euro zone helped balance weakness in the euro and other commodities.
Oil slipped below $84, pulled lower by expectations of a rise in US stockpiles and nagging concerns Greece’s economic trauma could have knock-on effects on the wider economy and fuel demand.