Shanghai extends losses to 5th day

Dow Jones/Singapore

Investors monitor and trade stocks at a securities exchange in Shanghai. The Shanghai Composite yesterday dropped 0.9% for its fifth straight day of losses

Asian stock markets ended mostly lower yesterday, with the Shanghai market extending its losing streak to five sessions amid concerns over China’s slowing economy and high inflationary pressures. “One could hardly say that risk was back on. Instead, it looks more like a tentative recovery but one lacking any confidence,” said Khoon Goh, senior economist at ANZ Bank in Wellington. The Shanghai Composite dropped 0.9% for its fifth straight day of losses, Japan’s Nikkei Stock Average fell 0.6% and Australia’s S&P/ASX 200 gave up 1.0%. South Korea’s Kospi fell 1.3%, while Hong Kong’s Hang Seng index added 0.1%.Banks were among the biggest losers in China after Standard & Poor’s said earlier Wednesday that inflation combined with slowing economic growth could trigger a dramatic increase in non-performing loans in the next two to three years. Agricultural Bank of China fell 2.5%, China Minsheng Banking lost 1.9% and Industrial Bank dropped 3.1%.The potential for a slowing economy hitting domestic demand growth for imported commodities and stronger concerns over Europe’s unfolding sovereign debt crisis hit ports and shipping firms. China Cosco Holdings dropped 0.9%, China Shipping Container Lines gave up 2.6% and Shanghai Port fell 2.8%. “The overall mood in the market is one of concern for the domestic economy...and this is taking place against a background of a brewing crisis in Europe,” said Soochow Securities analyst Zhu Haomin. Worries over Chinese demand for commodities resulted in a weak debut in Hong Kong for shares of Swiss commodities trading giant Glencore International. The stock finished 2.5% below its initial public offering of HK$66.53. Japanese heavy-machinery makers, which export to China, were also pressured by the weakness in the Shanghai market. Komatsu was off 1.6% and Hitachi Construction Machinery dropped 2.2%. Gains for some Japanese car makers restricted losses in Tokyo, after the Nikkei reported that Toyota Motor planned to bring back domestic auto production next month to as much as 90% of targets set before the March 11 earthquake, citing swift improvements in parts supplies. It also reported that the car maker now hopes to normalize production earlier than its previous November or December forecast. Toyota rose 2.2%, also driving increases in shares of other car makers. Nissan Motor rose 1.3%, while Denso Corp, a major Toyota supplier, gained 0.2%. Elsewhere in the region, Taiwan’s Taiex finished 0.3% lower, New Zealand’s NZX 50 fell 0.2% and Philippine shares slid 0.9%. Singapore’s Straits Times index fell 0.2%, Indonesian stocks lost 0.4% and Thailand’s SET index retreated 0.3%.