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Chinese shares tumble more than 8% leading Asian losses | |
(about 4 hours later) | |
Mainland Chinese shares plunged more than 8% as investors began to worry about another wave of new listings drawing up liquidity in the market. | |
Shares of Guotai Junan Securities - China's third-largest brokerage - jumped 44% on its debut after raising $4.8bn (£3bn) in the country's biggest initial public offering since 2010. | Shares of Guotai Junan Securities - China's third-largest brokerage - jumped 44% on its debut after raising $4.8bn (£3bn) in the country's biggest initial public offering since 2010. |
The Shanghai Composite was down 8.4% to 4,146.09 after its 13% fall last week. | |
In Hong Kong, the Hang Seng index fell 1.9% to 26,618.74. | |
Sentiment was also hit by a crackdown on margin trading and concerns over whether the government would continue to ease policy in order to boost growth in a slowing economy. | |
Regulators have been cracking down on illegal margin financing and urging brokerages to tighten rules. | |
However, Bernard Aw, market strategist at trading firm IG said the "correction" in the market was healthy in the longer term and it is what the central bank wanted to see. | |
"It is probably not a bad idea to repeat my view that China's leaders still view a strong capital market as beneficial for the Chinese economy, more importantly, a stable bull market is desired," he said in a note. | "It is probably not a bad idea to repeat my view that China's leaders still view a strong capital market as beneficial for the Chinese economy, more importantly, a stable bull market is desired," he said in a note. |
Japan data weighs | Japan data weighs |
Shares in Japan ended lower after government data showed a mixed picture of the world's third largest economy, which seems to be struggling to gain momentum. | |
Household spending rose 4.8% in May from a year ago to mark the first annual increase in over a year, a sign consumers are finally spending again after last year's sales tax rise. | |
But core consumer prices rose 0.1%, still well below the central bank's target of 2%. | |
The Nikkei 225 index ended down 0.3% at 20,706.15. | |
The unemployment rate was unchanged at 3.3% in May from April, in line with expectations. | |
Marcel Thieliant, Japan economist at Capital Economics, said Friday's data cast doubt on the Bank of Japan's (BOJ) upbeat view on the economy and consumer spending. | Marcel Thieliant, Japan economist at Capital Economics, said Friday's data cast doubt on the Bank of Japan's (BOJ) upbeat view on the economy and consumer spending. |
"With increasing signs that the economic recovery is faltering, we think the BOJ will have to step up the pace of easing before too long, perhaps as soon as October," he said. | "With increasing signs that the economic recovery is faltering, we think the BOJ will have to step up the pace of easing before too long, perhaps as soon as October," he said. |
Takeover talk | |
In Australia, the benchmark S&P/ASX 200 closed down 1.6% at 5,544.60. | |
Shares of supermarket giant Woolworths rose 3.9% after reports that US private equity firm KKR would bid to takeover the struggling retailer. | |
South Korean shares were bucking the trend, with the Kospi closing up 0.2% to 2,090.26. | |
The benchmark index ended four straight weeks of losses this week. | |