Chinese shares took another tumble on Tuesday amid persisting worries about the health of the world’s second-biggest economy.
Other bourses in the region also wobbled as cautious sentiment prevailed ahead of the Federal Reserve’s highly-anticipated meeting, alongside other risk events such as a sudden leadership change down under, CNBC reported.
An unimpressive handover from Wall Street also kept a lid on risk appetite. The Dow Jones Industrial Average and the S&P 500 declined 0.4% each overnight, while the tech-heavy Nasdaq inched down 0.3%.
China’s Shanghai Composite index jolted lower in the afternoon trading session to close down 3.55% at a two-and-a-half-week low.
Among China’s other indexes, the CSI300 Index—which tracks the largest listed companies in Shanghai and Shenzhen—eased 4%. The smaller Shenzhen Composite nearly doubled losses to 5%, ending at a near seven-month low. The ChiNext start-up board also receded more than 5%, extending Monday’s 7.5% sell-off which took it down below the key 2,000 level.
Hong Kong’s Hang Seng index dipped 0.3% ahead of the city’s second-quarter gross domestic product due for release after the market close.
Markets Unconvinced
Disappointing economic indicators, such as fixed-asset investment and industrial production, over the weekend had suggested further cooling in the world’s second-biggest economy that will likely prompt the government to roll out more support measures. However, markets were unconvinced that further stimulus was on the way.
Data from the ministry of finance also showed China’s fiscal spending jumped 25.9% in August from a year earlier, underscoring Beijing’s spending spree in a bid to shore up the faltering economy. Meanwhile, a Reuters report said Beijing has seized up to 1 trillion yuan($157 billion) from local governments who failed to use their budget allocations, as it looks for ways to spend its way out of an economic slowdown.
Australia’s S&P ASX 200 index ended at a one-week low as a sudden change in the country’s leadership dented sentiment for the local share market. The ruling Liberal Party voted out Tony Abbott late Monday in favor of longtime rival Malcolm Turnbull.
Meanwhile, the Reserve Bank of Australia held interest rates unchanged at 2% early September.
In the resources sector, market bellwether BHP Billiton eased 1.3%, while other miners such as Rio Tinto and South32 closed down 2.2% 7.5% respectively.
In Asian trade, the Australian dollar touched a more than two-week high of $0.7160 against the dollar, before paring gains to last trade at $0.7131.
