ASIA MARKETS: Shanghai, Hong Kong Stocks Slide; Yen Weighs Tokyo
02/19/2013| 04:18am US/Eastern
By Sarah Turner and V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) -- Stocks in Hong Kong and Shanghai got slapped Tuesday after several local Chinese governments imposed further restrictions on home purchases, with the central bank's move to curb liquidity in the money markets also weighing on sentiment.
Japanese shares retreated as the yen sprang higher after the nation's finance minister denied Tokyo was considering allowing purchases of foreign bonds.
"Investors [are] struggling to rediscover the bullish tone that has pushed many regional indices to multiyear highs," said Perpetual Investments' investment market research chief Matthew Sherwood.
The Hang Seng Index fell 1% in Hong Kong, while the Shanghai Composite Index skidded 1.6% for its worst percentage drop since a 1.8% decline on Jan. 11.
Chinese property developers were hit hard on news local governments in China have been moving to tighten home buyers' access to credit.
Shares of Gemdale Corp. plunged 7.9% and Poly Real Estate Group Co. sank 5.1% in Shanghai and China Vanke Co. (>> UNSP ADR EACH REPR) lost 4.3% in Shenzhen; in Hong Kong, shares of China Resources Land Ltd. (1109.HK) and China Overseas Land & Investment Ltd. (>> China Overseas Land & Investment Ltd.) shed 4.4% and 3.3%, respectively.
In another development that weighed on investor sentiment, the People's Bank of China on Tuesday offered 28-day repurchase agreements to drain 30 billion yuan ($4.8 billion) from the money markets, its first move to pull out liquidity from the local money markets in eight months.
Dariusz Kowalczyk, Crédit Agricole's senior economist, said the move was a "hawkish signal" from the central bank, adding that stocks in Shanghai fell following the move, "not surprisingly."
Elsewhere in the region, Japan's Nikkei Stock Average slipped 0.3%, giving back some of the gains made in the previous session, when the benchmark jumped 2.1%.
South Korea's Kospi gained 0.2%, Taiwan's Taiex rose 0.2%, and Australia's S&P/ASX 200 index edged up 0.4% to end at its highest point since September 2008.
Casino operators listed in Hong Kong saw some big losses amid a weakening outlook, with Deutsche Bank analysts saying that gaming figures so far in February suggest revenue may only rise 2% year-on-year this month, falling below market expectations for a 10% year-on-year rise.
"This may be partly luck-driven and partly due to less direct VIP play at Melco Crown Entertainment Ltd. (>> Melco Crown Entertainment Ltd (ADR)), which is under Taiwan investigation," the Deutsche Bank strategists said. "The market may react negatively to soft Chinese New Year VIP data," they added.
Sands China Ltd. (>> SANS CHIN ADR) dropped 4.4% and Galaxy Entertainment Group Ltd. (0027.HK) shed 4.9%. Melco shares tumbled 5.5%.
Shares of SCMP Group Ltd. , publisher of the South China Morning Post newspaper, plunged 7.4% after the firm said it was in talks for an acquisition. The stock, however, is still up more than 22% so far this year on gains recorded earlier, amid speculation the firm could be taken private by shareholder Kerry Media Ltd, controlled by Malaysian billionaire Robert Kuok.
The losses in Tokyo came after Japanese Finance Minister Taro Aso said the government wasn't considering purchasing foreign bonds, or changing the law that governs the Bank of Japan. The country's Prime Minister Shinzo Abe had said Monday that if the Bank of Japan fails to achieve its inflation target, then he might change the central-bank law.
Currency-sensitive firms lost ground Tuesday along with the dollar, with tech firms among the decliners. Tokyo Electron Ltd. , (>> TOK ELCTRN) gave up 2.5%, while robotics firm Fanuc Corp. (>> FANUC ADR) dropped 4.1%.
Renesas Electronics Corp. (>> RENS ELEC ADR) rose 2% in the tech sector, however, following a Nikkei news report saying the chip maker would appoint a new president as early as this month.
Earnings were providing a boost for some firms, with tire maker Bridgestone Corp. (>> Bridgestone Corp) up 10.4% after more than doubling its quarterly profits and forecasting record earnings for 2013.
Earnings from Australian companies saw Mount Gibson Iron Ltd. drop 3.9% after the iron-ore extractor said that its first-half profit slumped to 37.1 million Australian dollars ($38.2 million) from $129.9 million in the year-ago period.
Beverages firm Coca-Cola Amatil Ltd. rose 2% after updating investors.
APN News & Media (>> APN News and Media Limited) -- partly owned by Ireland's Independent News & Media PLC -- slumped 8.3% as the mass departure of the firm's chairman, chief executive officer and three independent directors of the board took effect Tuesday morning, following a spat on raising capital.
The departing directors wanted to announce a capital raising at the same time as the firm's results announcement on Feb. 21, APN said. However, shareholders Independent News & Media and Allan Grey, holding around 51% of the firm's capital, are opposed to raising capital at this time, it said.
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