World Economy

Asia Sags as China Stocks Wobble

Asia Sags as China Stocks WobbleAsia Sags as China Stocks Wobble

Asian stocks sagged on Monday, with risk sentiment dampened as Shanghai shares wobbled after the Chinese markets resumed trading following a four-day long weekend.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.7%, Reuters reported.

The index had already dropped earlier in the session following Friday’s Wall Street slide, triggered after the August US jobs report failed to give a clear view on the Federal Reserve’s interest rate hike.

Japan’s Nikkei lost 0.4% while South Korea’s Kospi dipped 0.1% and Australian stocks shed 0.7%.

Chinese stocks once again took center stage after their markets returned from the holidays, having been closed on Thursday and Friday as Beijing celebrated 70 years since World War Two’s end.

Shanghai shares initially rose as much as 1.8% following remarks over the weekend by regulators aimed at calming the market, but the relief proved short lived and the index was down 0.1% as of 0245 GMT.

US stock indexes dropped more than 1% on Friday after a mixed August jobs report did little to quell investor uncertainty about whether the Federal Reserve will hold off from hiking interest rates this month.

Nonfarm payrolls increased 173,000 last month, fewer than the 220,000 that economists polled by Reuters had expected. But the unemployment rate dropped to 5.1%, its lowest in more than seven years, and wages accelerated.

“The jobs report itself was good. The US economy is recovering, and it should be good for the Japanese economy if we didn’t have worries about China,” said Yoshihiro Okumura, an analyst at Chibagin Asset Management in Tokyo.

Underlining concerns about the health of the world’s second largest economy, China revised its annual economic growth rate in 2014 to 7.3% from the previously released figure of 7.4% on Monday.

The Australian dollar, used as a liquid proxy of China trades, fell to a fresh 6-1/2-year low of $0.6892 early on Monday.

Investors have been aggressive sellers of the Aussie in recent weeks, in large part due to heightened concerns about a hard landing for the Chinese economy. China is Australia’s top export market.