Mainland Chinese stocks finished lower for an eighth successive session Monday, as traders were unable to shed concerns that high inflation will drive Beijing into policies that could slow economic growth. Japanese stocks were pressured by a stronger yen against the U.S. dollar.
Many of the regional markets changed direction a few time during a choppy session, amid investor caution ahead of holidays Monday in the U.S. and U.K. and manufacturing purchasing managers’ indexes later this week from various Asian countries, including China.
After several rebounds during the session, the Shanghai Composite index finished the day 0.1% lower at 2706.36. Lingering concerns about monetary tightening have pulled the stock benchmark down more than 7% in May, says the report.
Wu Xiaoling, a former vice governor of the People’s Bank of China, said that the country should continue to tighten its monetary policy despite some signs recently of an economic slowdown.
“I think (the Shanghai market) is not too far from the bottom,” said Ben Kwong, Chief Operating Officer at KGI Asia in Hong Kong, though he added that he doesn’t think there’s much room to the upside, either, until investors believe inflation has been corralled, ending the need for further tightening.”
He said a decision last week by Petro China’s parent to acquire shares in the energy company was an indication that valuations were low and the worst may soon be over. PetroChina added 0.1%.
Poly Real Estate Group dropped 3.3%, Yanzhou Coal Mining gave up 2.8% in Shanghai trading.
Elsewhere in the region, Japan’s Nikkei Stock Average dropped 0.2% to 9504.97, South Korea’s Kospi dropped 0.3% to 2093.79, Australia’s S&P/ASX 200 gave up 0.4% to 4667.5 and India’s Sensex fell 0.2% to 18232.06.
Heading the other way, Hong Kong’s Hang Seng Index rose 0.3% to 23184.32, Taiwan’s Taiex rose 0.2% to 8823.68 and Singapore’s Straits Times Index rose 0.9% to 1076.50.
Dow Jones Industrial Average futures were 21 points higher in screen trade.
The drop in Shanghai didn’t stop the Hong Kong market from rising for a fifth day in a row. China Unicom Hong Kong added 2.9% on hopes for strong subscriber additions for the company’s 3G mobile services in coming months. Internet major Tenant Holdings added 1.4% on an upbeat earnings outlook.
Shares of some exporters were behind the decline in Tokyo as the U.S. dollar remained below the ¥81 level. Nintendo receded 1.7% while Toyota Motor dropped 0.2%.
Sony Corp. lost 2.1% after reports an executive would testify before the U.S. Congress over recent cyberattacks that compromised some customer data.
Honda Motor fell 1.3% after a Nikkei news report that it won’t go ahead with a new share buy-back in order to conserve cash.
In Sydney trading, financial stocks led the fall. The sector has suffered recently, in part from downbeat views from analysts. Commonwealth Bank of Australia fell 1.3% and Westpac Banking dropped 1.3%.
In currency trading, the U.S. dollar edged up against most major currencies amid jitters over Greece’s sovereign debt, reflecting reduced investor appetite for risky assets.
In Asian afternoon trade, the U.S. dollar was fetching ¥80.83, compared with ¥80.87 late Friday in New York. The euro, meanwhile, was buying $1.4289 from $1.4294.