World Economy

Asia Stocks Fall

Asia Stocks FallAsia Stocks Fall

Stock markets across Asia ended mostly lower on Monday, as China’s securities regulator urged tighter supervision of listed companies, while geopolitical tensions in South Korea continued to discourage buying.

The Shanghai Composite Index ended down 0.7%, while Singapore’s Straits Times Index was last off 0.9% and Taiwan Taiex ended down 0.2%. The Shenzhen Composite Index ended down 1.4%, MarketWatch reported.

Markets in Australia, New Zealand and Hong Kong, as well as most European exchanges, were closed for Easter Monday.

In China, market sentiment worsened over an escalating regulatory crackdown on stock manipulation, despite stronger-than-expected economic data for the first quarter. Over the weekend China’s top securities regulator, Liu Shiyu, urged stock exchanges to strengthen regulation and severely punish violations.

“Comments from Liu add psychological pressure on the market, which has been trading within a narrow range,” said Shen Meng, director at Chanson & Co, an investment firm, “We are seeing a quick shift in market mechanism where speculation will face greater clampdown and yield smaller returns.”

Blue chips in ship manufacturing, property and ports were among the biggest decliners, and many newly listed shares corrected sharply. More than 70 stocks fell by the 10% daily decline limit in Shanghai and Shenzhen. The China Securities Regulatory Commission said in a separate statement on Friday it will rein in speculation on new listings, which traders said triggered panic selling in those shares by some funds.

Elsewhere in Asia, Japan’s Nikkei Stock Average opened lower, but later recouped the declines to end up 0.1%, snapping a four-session losing streak. The fall was brought on by a stronger yen, which makes the nation’s exports less competitive. Havens such as the yen and gold have risen along with geopolitical uncertainties in the region—with the yen on Monday rising to new five-month highs against the dollar and the euro.

Concerns of military conflict between the US and North Korea grew over the past week. On Saturday, North Korea rolled a long-range ballistic missile, among other military equipment, through the streets of Pyongyang to commemorate the birth of the country’s late founder, Kim Il Sung. The next day it unsuccessfully fired a ballistic missile, prompting a senior (US President Donald) Trump administration official to warn that North Korea’s provocative behavior couldn’t continue—a warning underlined Monday by Vice President Mike Pence, who is visiting the region.

Still, stock selling appeared to be moderating as tensions failed to escalate to a direct military confrontation; Korea’s Kospi closed up 0.5%, recovering from recent declines.

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