The Shanghai Composite Index was up 0.7 percent at 3,816.60 and Hong Kong’s Hang Seng added 0.2 percent to 24,659.75.
The CSI300 index declined 0.1 per cent to 3,812.34. Still, Hong Kong shares are on track to lose 6% this month, marking its worst monthly performance since September.
To shore up markets after a 29 per cent tumble in the Shanghai Composite Index from its June high, the Chinese government has armed a state-run financing agency with more than US$480 billion to bolster the market, allowing hundreds of firms to suspend share trading, and banned major shareholders from selling stocks.
Second, the People’s Bank of China changed monetary policy as they became confident that inflation was coming back under control and growth began to slip due to poor demand for Chinese exports in Europe and North America.
Shanghai is down 28% since its peak in mid-June, despite fresh rhetoric from the securities regulator that it wouldn’t pull away from buying shares.
– Wellington shed 0.38 percent, or 22.39 points, to end at 5,870.77. While that’s spooked some investors, others have seen an opportunity to chase short-lived surges while the government appears to be buying in.
Traders are braced for more swings to come, and economists expect further announcements from the authorities in Beijing as they seek to restore confidence. “To put in plain language, speculative investors want to take profits from government-backed funds”.
The dollar ticked up, with analysts tipping further gains on expectations for a Federal Reserve interest rate rise as soon as September.
“At some point, the magnitude of the Chinese market has to reflect its industrial might”, said Yu-Min Wang, chief investment officer at Nikko Asset Management which oversees around $170 billion.
Commodities, battered by a stronger US dollar and worries about China’s slowdown, continued to slide. Emerging markets’ index ended its third consecutive month in the red against the backdrop of the ever-rising US dollar and a more complicated global trade outlook. Many materials are priced in the currency, making them more expensive for foreign buyers as the dollar strengthens. Investors are also looking over a report that showed the U.S. economy rebounded in the second quarter.
Gold has sank to five-year lows, and is now trading down 0.4% at $1083.70 a troy ounce in Asia. For the month so far, it has slumped 14.2 per cent, the biggest monthly drop since August 2009.
NEW YORK (AP) – Stocks are opening lower as investors respond to some disappointing results from U.S. companies.
Japan’s Nikkei stock index .N225 was down about 0.2 percent, poised to log a 0.3 percent loss for the week.
A recent report on CNBC noted that this sudden reversal-of-fortune for the Chinese stock market might have profound implications for U.S. companies that generate significant revenue from China and its Asian neighbors.
One source at a mainland brokerage in Hong Kong said they had received enquiries over the phone directly from the CSRC seeking evidence of “naked shorting” – when an investor tries to profit from falling prices of a given stock without actually owning the shares necessary to complete the transaction, a practice that is restricted in most markets.
