Hong Kong stocks ended Wednesday at a more than five-month low, while mainland China stocks also fell sharply on lingering worries about a slowdown in the world’s second-largest economy.
The benchmark Shanghai Composite fell 1.9% to 3,215.2, its lowest closing level since Aug. 4, with the blue-chip CSI 300 index also dropping 1.9% to end at its lowest closing level since August 3 of 4,082.4.
The start-up board’s ChiNext Composite index fell 3.6%, while Shanghai’s technology-focused STAR50 index fell 3.5%.
In Hong Kong, the benchmark Hang Seng index ended down 1.2% at 19,268.7, its lowest close since March 15. Analysts attributed the weakness to concerns about the Chinese economy.
Developers led the losses, with an index that tracks major Chinese property companies listed in Hong Kong ending down 2%.
“Beijing may need to consider a more comprehensive solution in its efforts to resolve the difficult property market situation,” said Ting Lu, chief China economist, Nomura. “However, there is a limited likelihood that such a solution will be reached before the end of 2022.”
Extreme heat in China has also wreaked havoc on crops and power supplies despite lower temperatures in some areas as authorities in the Yangtze basin scramble to limit climate change damage to crops and livestock.
Electric vehicle (EV) makers were among the biggest losers, with Xpeng closing down 12.2% after reporting a bigger-than-expected quarterly loss.
Other EV makers also fell, with Hong Kong-listed rivals NIO, Li Auto, BYD and Geely Automobile all down around 5%.
SEE ALSO: Unemployment benefits in China hit a record $5.2 billion in June
Halt IPOs linked to Chinese merchants
Meanwhile, Chinese stock exchanges have halted processing of more than 20 IPO plans sponsored by Chinese Merchant Titlesfollowing an investigation of the broker, according to exchange disclosures.
The Shenzhen Stock Exchange has suspended 15 IPO plans for its ChiNext board, while the Shanghai Stock Exchange has suspended five IPOs targeting its tech-focused STAR market since last Friday, according to filings in stock Exchange.
Three other IPOs targeting the Beijing Stock Exchange were also affected.
The exchanges attributed the stops to a China Securities Regulatory Commission (CSRC) investigation into China Merchants Securities, their joint sponsor.
The CSRC decided to press charges against China Merchants because it failed to exercise due diligence and was suspected of rule violations in a case in 2014, the broker said earlier this month.
The brokerage said it would cooperate fully with the CSRC.
China’s stock exchanges previously halted processing batches of IPO applications as regulators investigated intermediaries.
Nikkei follows Wall Street lower
Japan’s Nikkei stock average ended at a two-week low on Wednesday, following overnight declines on Wall Street after weak data, although gains by energy companies on rising crude prices limited the loss.
The Nikkei fell 0.5% to 28,313.47, its lowest closing level since Aug. 10 and a fifth straight day of losses, while the broader Topix edged down 0.2% to 1 967.18, also a two-week low.
The utilities sector was the best performer in the Nikkei, while energy stocks were boosted by an overnight spike in crude oil prices after Saudi Arabia floated the idea of oil production cuts. OPEC+.
Electric Tokyo was the Nikkei’s top gainer, jumping 9.96% after a local media report said the government was preparing to restart some nuclear reactors.
Technology was the worst performing sector, followed by healthcare and consumer stocks.
MSCI’s broadest index of Asia-Pacific stocks outside Japan fell 0.5%, while the US dollar hid just below the highs of most major currencies and near a high. 20 years for the euro.
Dollar strength elsewhere pushed the Aussie and Kiwi lower, although the yen edged higher to 136.48 to the dollar.
Brent crude futures slipped below $100 a barrel – the latest contract was down 43 cents at $99.79 – amid some doubts over talk of Saudi supply cuts. U.S. crude futures fell 30 cents a barrel to $93.44.
Spot gold was flat at $1,747 an ounce. Bitcoin still bears the scars of a sudden drop late last week and is parked at $21,490.
Aust shares two days of losses
Australian stocks ended their two-day losing streak, helped by surging mining and energy stocks, while economic data and hawkish comments from a US Federal Reserve official kept sentiment in check.
The S&P/ASX 200 index ended up 0.5% at 6,998.1 points at the close of trade, after losing about 2% in the previous two sessions.
Export-focused miners jumped 1.3% after China’s iron ore prices rose on prospects of strong demand ahead of the peak of the construction season. Industry giants BHP Group and Fortescue Metals Group gained 1.1% and 0.4% respectively.
Financials also joined the broader rally, up 0.4%, with all of the so-called “Big Four” banks trading in positive territory.
Energy stocks emerged as the benchmark’s top gainers jumping 2.8% during the session, with Santos Ltd and Woodside Energy Group gaining 2.1% and 3.4% respectively.
Indian stocks rise slightly
End of Indian stocks with marginal gains after a volatile trading day on Wednesday, privately supported banks.
The NSE Nifty 50 index closed 0.16% higher at 17,604.95, after falling 0.45%. The S&P BSE Sensex ended up 0.1% at 59,085.43.
The Nifty Private Bank Index gained 1.6% as shares of RBL Bank jumped nearly 17%. The stock rose in the past two days after its board approved the fundraising.
Shares of NDTV Ltd rose 5% to their highest level in 14 years, a day after billionaire Gautam Adani’s conglomerate said it was seeking control of a majority stake in the TV media company.
Indian equities are expected to post only minimal gains for the rest of the year amid rising volatility, according to strategists polled by Reuters, who warned that the risk from the lackluster outlook is biased to the downside.
- Reuters with additional editing by Jim Pollard