Don’t miss the latest developments in business and finance.

Asian markets end weak

Image
SI Reporter Agencies Mumbai
Last Updated : Jan 20 2013 | 1:37 AM IST

Asian markets mostly ended on a negative zone with markets in China, Hong Kong and Indonesia dropping nearly 1 per cent each. Markets brushed off the modestly higher leads from Wall Street after data showed the US economy expanded faster than previously expected.

Shanghai Composite dropped 0.79 per cent for the second straight day as government tightened controls on foreign investment in property and a measure of lending costs between banks rose to the highest in three years. The index ended at 2,855, as moods were dampened due to a cash crunch in the banking system.

China's benchmark short-term money market rate spiked more than 140 basis points to its highest level in over two years, as traders reported a sharp shortage of funds in the banking system after a series of monetary tightening steps. As availability of money for borriwng by institutions such as brokerages and mutual funds would decrease, there would be less buying support to lift the markets.

Banks were the major drag on fears of the Central bank introducing new measures to manage bank credit. Major Chinese banking stocks were range-bound. Shares of China Merchants Bank, Industrial and Commercial Bank of China and Bank of China were trading down between 0.1 per cent and 0.3 per cent.

Hang Seng moved up marginally in morning trades with gains in retailers and local property developers. However, it ended down 0.62 per cent at 22,903.

Consumer goods exports company Li & Fung jumped in trades after announcing a takeover of an Italian fashion brand. With oil trading near two-year highs, energy shares jumped.

Rio Tinto's bid of $16.00 per share for Riversdale Mining, valuing the coal miner at $3.9 billion has been a major talking point in global markets today. Markets in Australia rose on this development.

Taiwan Weighted and Straits Times advanced marginally while Japan's Nikkei remained closed for a national holiday.

Also Read

First Published: Dec 23 2010 | 2:27 PM IST

Next Story