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Asian shares down on China, Hong Kong reversals

Asian shares down on China, Hong Kong reversals

Asian stock markets suffered a regionwide retreat Thursday, as Chinese and Hong Kong stocks fell back a day after posting big gains on speculation that Beijing planned to implement market-boosting measures.
The benchmark Shanghai Composite Index shed 3.6 percent to 2,431.72, and Hong Kong's Hang Seng Index fell 2.6 percent to 20,392.06.
Japanese stocks sagged for a third straight day on lingering concerns about the U.S. despite an overnight rise on Wall Street. The benchmark Nikkei 225 index lost 99.48 points, or 0.77 percent, to close at 12,752.21 _ its lowest finish in more than four months.
Markets in South Korea, Taiwan, Singapore and Australia also fell.
Shanghai's benchmark had gained 7.6 percent Wednesday after a research report by JPMorgan & Chase suggested officials were planning a major economic stimulus package, fanning hopes of steps that might finally end a long downward correction.
But the rally proved to be short-lived. With no word from China's central government on Thursday, many investors decided to book profits.
"I think you can't hang on to hope more than 24 hours in this market," said Benjamin Collett, head of hedge fund sales trading at Daiwa Securities SMBC Co.
Economists were also quick to cast their doubts.
Despite worries over sagging demand for Chinese exports and shrinking profit margins for industries hit hard by rising costs, economists are forecasting economic growth this year of at least 9 percent, and retail sales and other indicators of domestic demand have remained robust.
Leadership has announced various piecemeal measures to help key industries, including textile exporters, but its main preoccupation so far has been with controlling inflation.
"It's highly unlikely that the government would put forward a fiscal package sufficient to have a meaningful impact on growth," Jonathan Anderson, an economist with UBS, said in a report issued Thursday.
Investors sold to cash in profits from the day before, with the market's biggest listed share, PetroChina, losing 3.7 percent to 13.71 yuan.
Among other major decliners, newly listed China Southern Locomotive & Rolling Stock fell by the 10 percent maximum daily limit to 3.49 yuan. Shares in the company, China's biggest maker of railway cars, began trading Thursday in Hong Kong, where they were changing hands at 2.64 Hong Kong dollars late in the afternoon, only marginally higher than their public offering price of HK$2.60.
Financial issues faltered throughout Asia, as investors remained wary of U.S. financial markets. The prospect of a potential government bailout of U.S. mortgage financiers Fannie Mae and Freddie Mac sent their shares tumbling more than 20 percent overnight.
In Tokyo, Sumitomo Mitsui Financial Group Inc. shed 2.07 percent, and securities giant Nomura Holdings Inc. fell 1.64 percent.
Debt-riddled Australian investment group Babcock & Brown Ltd. plunged more than 35 percent following the exit of its CEO and chairman, fueling further questions about its future.
CITIC Securities bucked the trend, however, gaining 3.7 percent to 19.40 yuan following reports a company official had denied holding talks with Lehman Brothers on a possible stake investment.
Major Japanese telecommunications names also fell, including KDDI Corp., down 1.41 percent to 629,000 yen, and mobile provider NTT DoCoMo, Inc., down 1.08 percent at 164,800 yen.
"The mobile phone market, which has driven the expansion of the overall telecom market, is approaching saturation in all respects," said Deutsche Securities analyst Kenji Nishimura in a research memo.
Chinese airlines saw big declines, with China Southern losing 4.6 percent to HK$2.5 and China Eastern off 7.1 percent to HK$1.56.
Meanwhile, oil prices rose in Asia _ bad news for consumers, but a boost to energy company stocks.
Light, sweet crude for October delivery was up US$1.20 cents at US$116.76 a barrel in electronic trading on the New York Mercantile Exchange by late afternoon in Singapore.
Nippon Oil Corp., Japan's largest oil distributor, rose 1.68 percent to 667 yen. Australia's Santos Ltd. jumped 5.7 percent, and CNOOC rose 0.56 percent in Hong Kong.
In currencies, the dollar fell to 108.70 yen from 109.72 yen late Wednesday. The euro stood at US$1.4778, up from US$1.4745.


Updated : 2021-04-11 22:15 GMT+08:00