Asian shares closed mostly lower on Thursday on fears that slowing global economic growth will hit corporate profits, with the market in China slipping back 3.6% after an earlier surge.
The Shanghai market fell back after rocketing more than 7.5% on Wednesday on claims that Beijing would soon take steps to shore up China’s ailing stock market and slowing economy.
But investors turned cautious on Thursday with no official word yet on whether the claims are true. The Chinese stock market has tumbled some 60% since a peak in October last year.
A Tuesday photo of a board displaying share prices in Tokyo. The Tokyo Stock Exchange’s benchmark Nikkei-225 index lost 0.77% on Thursday as there were very few buyers. Photograph: Yuriko Nakao /Reuters
Leading the decline were power generators, which took a beating after oil prices rose overnight for a second consecutive session.
“Unless oil prices fall drastically, coal prices will remain high and power generators will still fail to enjoy their past days of prosperity,” Haitong Securities’ analyst Zhang Qi said.
Meanwhile, China's largest lender, the Industrial and Commercial Bank of China, said it was the world’s most profitable bank over the first half of the year after earning 64.879 billion yuan ($9.4 billion, or Rs40,984 crore).
In Mumbai, the benchmark Sensex index of the Bombay Stock Exchange closed 2.96% lower, dealers said. The index fell 434.5 points to 14,243.73.
Elsewhere in Asia, Japanese market fell 0.77%. Official figures showed Japan’s trade surplus tumbled for a fifth straight month in July as China overtook the ailing US economy to become the country’s biggest export market.
Hong Kong shares fell more than 2.5% and Australia 1.1%, while Taiwan, South Korea and Singapore also tumbled.
Concerns about the health of the US mortgage finance giants Fannie Mae and Freddie Mac continued to weigh on investors, who were also waiting for jobs data for clues on the health of the US economy.
In Japan, the Tokyo Stock Exchange’s benchmark Nikkei-225 index lost 99.48 points to end at 12,752.21.
“Unless fresh trading cues emerge, the Nikkei may enter a slow downward trend, as there are very few buyers,” Hiroyuki Fukunaga, chief executive officer at Investrust, said.
In Hong Kong, the Hang Seng Index fell 539.20 points to 20,392.06. Taifook Securities said in a note that “an atmosphere of caution continues to blanket the local bourse” as Beijing remains silent aboutits plans.
In Sydney, the S&P/ASX 200 index fell 54.3 points to 4,875.2, while the broader All Ordinaries dropped 47.9 points to 4,949.6.
“The financials are down today on more negative news out of the US and the market is probably watching the reaction to Babcock and Brown,” CMC Markets senior dealer Dominic Vaughan said.
The troubled investment manager released first-half results showing group net profit fell 30% in the six months ended 30 June due to write-downs.
Australia’s national airline, Qantas Airways Ltd, reported a 44% increase in annual net profit despite high fuel prices.
In Taiwan, the main index closed 1.74% lower, dealers said. The weighted index fell 122.42 points to 6,918.48.
“Investors chose to sell their stocks, indicating that they were short of confidence,” said Young Wang of Yuanta Securities Investment Consulting.
South Korean stocks also closed down, by 1.83%. The benchmark Kospi index lost 28.12 points to close at 1,512.59.
“The main problem is the sharp decline in the number of stock buyers,” given the uncertain outlook for global economic growth, Samsung Securities analyst So Jang-Ho said.
In Singapore, the blue-chip Straits Times Index closed down 1.39%, or 38.28 points, at 2,713.47 on volume of 858.86 million shares.
“Everyone is now trading on the back of fear. Right now, it’s all about capital preservation,” a dealer said.
Singapore Airlines Ltd, shipping firm Neptune Orient Lines Ltd, and the world’s biggest maker of offshore oil rigs, Keppel Corp., all ended in red.
The Kuala Lumpur Composite Index, the benchmark index of the Malaysian market, fell 1.78 points to end at 1,071.43.
Opposition leader Anwar Ibrahim is contesting a by-election on 26 August which is expected to return him to parliament after a decade-long absence, and propel his ambitions of seizing power from the ruling coalition. “Many investors prefer to stay on the sidelines...we expect a greater sense of certainty after the by-election and budget next week,” a dealer said.
In Bangkok, share prices closed 1.96% lower, dealers said. They said market sentiment dampened after a fall in the index following sales of major shares.
The Stock Exchange of Thailand (SET) composite index lost 13.52 points to close at 676.53 points, while the blue-chip SET-50 index shed 11.79 points to close at 476.22.
Indonesian shares, however, bucked the trend and climbed by 0.9%, dealers said. The Jakarta Composite Index rose 18.6 points to 2,088.25.
“The main index’s gains weren’t as impressive as yesterday (Wednesday) as some investors cashed in gains on any rebound,” one trader said.
In the Philippines, shares closed 0.9% lower, dealers said. The composite index fell 24.74 points to 2,656.92 points. The all-share index fell 0.89% to 1,651.15 points. “The market is on a consolidation mode because there’s no significant development to perk up investor interest,” Ron Rodrigo of DBP Daiwa Securities said.
However, in New Zealand, share prices closed little changed, dealers said. The benchmark NZX-50 index rose 0.04 points to 3,332.06.