Trading in mainland China was suspended for the rest of the day after the CSI 300 index tumbled more than 7% in early trade, triggering the market's circuit breaker for a second time this week. China's central bank again surprised markets by setting onshore yuan's value lower to the US dollar, deepening concerns about the economy and sending the domestic stock markets tumbling. The People's Bank of China set the daily yuan reference-exchange rate against the US dollar 0.5% weaker compared with the previous day's closing level, marking the largest adjustment toward yuan weakness since the currency devaluation on 13 August 2015.
Among Asian bourses
Australian share market ended down for fourth consecutive session, hit by risk aversion selloff after an unexpected plunge in domestic building approvals in November of last year and as China market suffered 7% circuit breaker for the second time this week. All ASX sectors traded in the red with energy, materials, and financials leading declines. At the close, the benchmark S&P/ASX 200 index tumbled 112.80 points, or 2.2%, to 5010.30 points, while the broader All Ordinaries index lost 103.20 points, or 2.11%, to 5068.80 points.
Home building approvals suffered their biggest slide in three-and-a-half years in November. Australian Bureau of Statistics (ABS) Building Approvals showed that the number of dwellings approved fell seasonality adjusted 12.7% month-on-month in November 2015, while it was down 8.4% from corresponding year earlier period. Private house approvals fell 0.5% month-on-month in November, while it was down 1.8% over the year. Private sector dwellings excluding houses fell 23% month-on-month in November, while it was down 14.1% over the year.
Separately, ABS data showed the balance on goods and services was a deficit of A$2,906m seasonally adjusted in November 2015, a decrease of A$341m (11%) on the deficit in October 2015. In seasonally adjusted terms, goods and services credits rose A$160m (1%) to A$26,764m, while goods and services debits fell A$182m (1%) to A$29,670m.
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Shares of material and energy sectors lost further ground today, inline with weak commodity prices. Among major miners, BHP Billiton shed 4.8% to A$16.33, Rio Tinto dropped 4.8% to A$40.70, and iron ore miner Fortescue Metals sank 5.6% to A$1.68. Energy shares skidded, too, with Woodside Petroleum down 5.1% to A$26.94, Santos down 7.4% to A$3.25, and Origin Energy down 7.6% to A$4.35.
Nikkei sinks 2.33% on stronger yen
Risk aversion selloff dominated the Japan share market for fourth straight session, due to sharp appreciation of yen against the basket of major currencies after another rout in the Chinese market today. Meanwhile, renewed geopolitical tensions, this time on the Korean peninsula, also weighed down investors sentiments. Total 32 out of 33 TOPIX sectors recorded losses, with Mining, Precision Instruments, Iron & Steel, Marine Transportation, and Machinery issues being major losers. The 225-issue Nikkei Stock Average declined 423.98 points, or 2.33%, to 17767.34. The Topix index of all Tokyo Stock Exchange First Section issues lost 30.90 points, or 2.08%, to 1457.94.
Shares of export-related companies fell further after yen appreciated to lower-118 level against the dollar. A stronger yen can pressure exporters' earnings when they are translated back into the Japanese currency. Sony Corp dropped 3.5% and Panasonic Corp fell 2.3%, while Toyota Motor Corp dropped 2.6%, Nissan Motor Co slipped 3.7% and Mazda Motor Corp. was 4.1% lower. Japan Display Inc. lost 3.5%, while Alps Electric Co. sank 4.4%. Sharp Corp. slumped 2.5%. Fanuc Corp dipped 2.2% and TDK Corp shed 2.5%. Soy sauce maker Kikkoman Corp, which gets 47% of revenue from North America, dropped 1.2%. Subaru automaker Fuji Heavy Industries, which relies on North America for 60% of sales, lost 4.3%.
Shares of Japanese companies that rely on China for a large part of their businesses also declined. The yen traded at 17.64 per yuan in offshore trading, near the highest since 2014, after China's central bank cut its currency's reference rate against the dollar by 0.5%. Air-conditioner maker Daikin Industries, which gets a fifth of sales from China, lost 5.6%. Mobile games maker Nexon Co., which gets more than a third of revenue from the region, sank 4%.
Shares of oil explorers and other commodity-related companies met with selling due to a plunge in crude oil prices. West Texas Intermediate touched $32.77 a barrel after data yesterday showed U.S. gasoline inventories surged the most in 22 years, while crude inventories climbed to an all-time high. Oil explorer Inpex Corp dropped 5.2% and Oil refiner JX Holdings Inc. lost 32.5, while JGC Corp., which provides services to energy firms, slumped 2.3%. Sumitomo Metal Mining Co. dropped 3.8% and Nippon Steel & Sumitomo Metal Corp slid 3.8%.
China Market hits 7% lower circuit
The Mainland China stock market locked at 7% lower circuit. The halt was the second this week for China's stock market as worries continued over its economy. The slide came after China's central bank lowered the yuan's daily reference rate by the most since last summer. The Shanghai Composite Index locked 7.04%, or 236.84 points, lower circuit at 3125. The Shenzhen Composite Index, which tracks stocks on China's second exchange, tumbled 8.24%, or 175.87 points, to close at 958.09. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, shrank 8.58%, or 211.84 points, to close at 2256.52.
The China market has suffered second lower circuit breaker of 7% this week, after another weakening in Chinese currency, the renminbi intensified concerns about capital flight and the health of the world's No. 2 economy. The People's Bank of China set the daily yuan reference-exchange rate against the U.S. dollar at 6.5646, 0.5% weaker compared with the Wednesday's fixing level of 6.5314.
The Mainland China market has suffered a nerve-jangling 14-minute rout today. Just 13 minutes after opening, internal circuit breakers kicked in after the market fell by 5%. After pausing for 15 minutes, the market reopened only to tank again, losing a further 2% in less than one minute. At 7%, the market was forced to shut as additional circuit breakers kicked in. It was frenetic, and to those unaccustomed to the trials and tribulations of Chinese markets, undoubtedly scary.
More than 1,600 stocks fell by their daily 10% downward trading limit Thursday, according to Wind Information. As Chinese stocks tumbled, China's yuan fell as much as 0.6% onshore. In the offshore market, where the yuan is traded freely, the yuan fell as much as 0.9%.
Hong Kong Market endures losses
The Hong Kong stock market endured another day of losses in heavy trade, as risk aversion selloff flared after trading in the world's second-biggest equity market was halted following another huge stock plunge. The slide came after China's central bank lowered the yuan's daily reference rate by the most since last summer. Chinese stocks closed early after the CSI 300 Index slumped 7.2 percent, triggering an automatic halt, the second time trading has been stopped this week. The local benchmark opened down 208 points at 20,772. It then saw its losses widen to as much as 656 points at an intra-day low of 20,323. The benchmark Hang Seng Index tumbled 647.47 points, or 3.09%, to 20333.34 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, dropped 383.82 points, or 4.2%, to 8753.97 points. Turnover soared 43% to HK$107.2 billion from HK$75.2 billion on Wednesday.
Shares Hong Kong-listed oil majors suffered after oil prices tumbled 6% overnight, with Brent February futures breaching the US$33 level, the first time since April 2004. Sinopec (00386) sank 7% to HK$4.14. CNOOC (00883) and PetroChina (00857) fell 6% and 7% to HK$7.55 and HK$4.56.
Macau gaming counters were lower in tandem with the downtrend. Sands China (01928) descended 7% to HK$23.6. It was the top blue chip loser. Galaxy Ent (00027) also came down nearly 7% to HK$22.45. SJM (00880) dumped 5% to HK$5.01.
BYD (01211) swopped 10% to HK$37.15 after Morgan Stanley downgraded its rating and target price to "underweight" and HK$30. Geely (00175) also slipped 6% to HK$3.47 despite the company issued positive profit alert.
Sensex tumbles to 19-month low
As another China led selloff gripped global markets, Indian stocks witnessed a steep slide, with the barometer index, the S&P BSE Sensex, falling below the psychological 25,000 level. The Sensex lost 554.50 points or 2.18% to settle at 24,851.83. The 50-unit Nifty 50 index slumped 172.70 points or 2.23% to settle at 7,568.30. The Sensex hit its lowest closing level in more than 19 months. The Nifty hit its lowest closing level in more than 17 weeks.
All the nineteen sectoral indices on BSE edged lower. The BSE Basic Materials index (down 3.65%), BSE Utilities index (down 2.56%), BSE Auto index (down 3.72%), BSE Energy index (down 2.36%), BSE Oil & Gas index (down 2.83%), BSE Realty index (down 4.5%), BSE Power index (down 3.45%), BSE Finance index (down 2.38%), BSE Metal index (down 3.72%), BSE Bankex index (down 2.38%), BSE Industrials (down 3.54%), BSE FMCG index (down 2.23%) underperformed the Sensex. The BSE Telecom index (down 1.44%), BSE IT index (down 1.57%), and BSE Healthcare index (down 2.12%) outperformed the Sensex.
Shares of oil exploration and production (E&P) companies edged lower as global crude oil prices fell sharply. Concerns about Chinese demand sent shares of Tata Motors tumbling. Shares of engineering and construction major L&T edged lower on concerns that the slowdown in the Middle East due to the crash in crude oil prices could affect the company's revenue. Axis Bank moved lower after reports that the government is mulling to sell a part of its stake in the private sector bank.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index slid 1.1% to 7990.39. South Korea's KOPSI slid 0.3% to 1925.43. Malaysia's KLCI added 0.1% to 1667.97. Singapore's Straits Times index sank 1.1% at 2804.27. Indonesia's Jakarta Composite index added 1.1% to 4609. New Zealand's NZX50 fell 0.3% to 6262.52.
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