Dow Jones/Singapore
After several rebounds during the session, the Shanghai Composite index finished the day lower at 2706.36. Lingering concerns about monetary tightening have pulled the stock benchmark down more than 7% in May
Mainland Chinese stocks finished lower for an eighth successive session yesterday, as traders were unable to shed concerns that high inflation will drive Beijing into policies that could slow economic growth. Japanese stocks were pressured by a stronger yen against the US dollar.
Many of the regional markets changed direction a few times during a choppy session, amid investor caution ahead of holidays Monday in the US and UK and manufacturing purchasing managers’ indexes later this week from various Asian countries, including China.
After several rebounds during the session, the Shanghai Composite index finished the day 0.1% lower at 2706.36. Lingering concerns about monetary tightening have pulled the stock benchmark down more than 7% in May.
Wu Xiaoling, a former vice governor of the People’s Bank of China, said that the country should continue to tighten its monetary policy despite some signs recently of an economic slowdown.
“I think [the Shanghai market] is not too far from the bottom,” said Ben Kwong, chief operating officer at KGI Asia in Hong Kong, though he added that he doesn’t think there’s much room to the upside, either, until investors believe inflation has been corralled, ending the need for further tightening.”
He said a decision last week by PetroChina’s parent to acquire shares in the energy company was an indication that valuations were low and the worst may soon be over. PetroChina added 0.1%.
Poly Real Estate Group dropped 3.3%, Yanzhou Coal Mining gave up 2.8% in Shanghai trading.
Elsewhere in the region, Japan’s Nikkei Stock Average dropped 0.2% to 9504.97, South Korea’s Kospi dropped 0.3% to 2093.79 and Australia’s S&P/ASX 200 gave up 0.4% to 4667.5.
Heading the other way, Hong Kong’s Hang Seng Index rose 0.3% to 23184.32, Taiwan’s Taiex rose 0.2% to 8823.68 and Singapore’s Straits Times Index rose 0.9% to 1076.50.
The drop in Shanghai didn’t stop the Hong Kong market from rising for a fifth day in a row. China Unicom Hong Kong added 2.9% on hopes for strong subscriber additions for the company’s 3G mobile services in coming months. Internet major Tencent Holdings added 1.4% on an upbeat earnings outlook.
Shares of some exporters were behind the decline in Tokyo as the dollar remained below the ¥81 level. Nintendo receded 1.7% while Toyota Motor dropped 0.2%.
Sony Corp lost 2.1% after reports an executive would testify before the US Congress over recent cyber attacks that compromised some customer data.
Honda Motor fell 1.3% after a Nikkei news report that it won’t go ahead with a new share buy-back in order to conserve cash.
In Sydney trading, financial stocks led the fall. The sector has suffered recently, in part from downbeat views from analysts. Commonwealth Bank of Australia fell 1.3% and Westpac Banking dropped 1.3%.