Tightening worries weigh on Chinese shares; RBI move lifts India
By V. Phani Kumar, MarketWatch , Shri Navaratnam and John Phillips
HONG KONG (MarketWatch) — Asian markets struggled for direction Thursday, as investors worried over euro-zone sovereign-debt problems, while Chinese stocks slipped on lingering worries about monetary-policy tightening by Beijing.
The Shanghai Composite index (CN:SHCOMP 2,898, -13.28, -0.46%) fell 0.5% and Hong Kong’s Hang Seng index (HK:HANGSENG 22,669, -306.57, -1.33%) fell 1.3%.
After markets in the region closed, Standard & Poor’s lifted China’s long-term sovereign credit rating to AA- from A, saying the government had deftly handled the financial crisis and that a higher rating reflected the nation’s improved fiscal position and growth prospects.Read story on S&P’s upgrade of China’s long-term credit rating.
Shares in Mumbai rebounded from initial losses after the Reserve Bank of India left interest rates unchanged but moved to ease a liquidity crunch in the banking system.
South Korea’s Kospi (XX:$SEU 2,017, +8.43, +0.42%) lost 0.4%.
Australia’s S&P/ASX 200 (AU:XJO 4,784, +16.19, +0.34%) and Taiwan’s Taiex finished 0.3% higher, while Japan’s Nikkei Stock Average (JP:NI225 10,311, +1.51, +0.02%) ended little changed from the previous day’s close.
Sentiment was subdued in some markets after Moody’s Investors Service said on Wednesday that it may downgrade its ratings on Spanish government debt due to the country’s high demand for refinancing and its problems meeting its borrowing needs next year.
“Sovereign-debt concerns continue to ripple around the world,” said Macquarie Private Wealth investment adviser James Rosenberg in Sydney. “The market is oscillating between focusing on a reasonably good value and a reasonably good economic outlook globally versus rising risks.”
Dow Jones Industrial Average (DJIA 11,457, -19.07, -0.17%) futures were up eight points in screen trade.
In China, stocks continued to reflect persistent concerns about further tightening measures from Beijing after policy makers last week raised banks’ reserve requirement ratio for the sixth time this year to curb an overheating economy and inflation that recent hit a new two-year high.
“[People] are worried the central bank will launch further policy tightening measures,” said Zhang Zhuo, a strategist at Minsheng Securities.
Financial, metal and automobile stocks were hit, with Ping An Insurance Co. (PNGAY 21.92, -0.72, -3.18%) (HK:2318 82.00, -3.90, -4.54%) losing 2.9%, SAIC Motor Co. (CN:600104 16.38, -0.46, -2.73%) dropping 2.7% and Jiangxi Copper Co. (JIXAY 126.23, -2.52, -1.96%) (CN:600362 39.83, -1.03, -2.52%) down 2.5% in Shanghai.
In Hong Kong, Ping An dropped 4.5% and Jiangxi (HK:358 23.85, -0.80, -3.25%) was down 3.3%, while Dongfeng Motor Group Co. (HK:489 14.26, -0.32, -2.20%) (DNFGF 1.90, -0.06, -3.06%) was down 2.2%.
