Asian shares fell last week, dragging the benchmark MSCI Asia Pacific Index to its biggest weekly drop since March, as concerns mounted the region’s central banks will tighten monetary policy to curb inflation.
Bank of China Ltd, the nation’s third-biggest lender, sank 3.6 percent in Hong Kong, as Chinese banks started to restrict new loans. BHP Billiton Ltd, the world’s biggest mining company, dropped 5.5 percent in Sydney as metal prices fell.
Toyota Motor Corp, the world’s biggest auto maker, tumbled 14 percent after it expanded a recall of vehicles with a gas-pedal flaw.
The MSCI Asia Pacific Index dropped 4.5 percent to 116.83, the biggest decline since the week ended on Feb. 20.
The gauge has fallen 7.8 percent in the past two weeks as US President Barack Obama proposed measures to limit risk taking at banks and China took steps to rein in lending growth.
“There is less appetite for risk and a lot more cautiousness in the market,” said Stephen Halmarick, Sydney-based head of investment-markets research at Colonial First State Global Asset Management, which holds about US$135 billion.
“China’s tightening moves and the recent US banking regulation has unsettled people’s expectations about liquidity,” he said.
The weekly decline followed a 52 percent rise for the MSCI Asia Pacific Index in the 12 months to Jan. 22 as growth in China helped the global economy emerge from the worst recession since World War II.
The Nikkei 225 Stock Average declined 3.7 percent last week amid concern a weakening dollar would hurt the value of US sales at Japanese companies. US jobless claims for the week ended on Jan. 23 declined less than some economists expected.
Australia’s S&P/ASX 200 Index fell 3.8 percent as the government reported a bigger-than-estimated increase in fourth-quarter consumer prices, fueling speculation of more interest-rate increases.
The Reserve Bank of Australia raised borrowing costs three times last year and traders are betting policy makers will again raise rates on Tuesday.
Chinese banks fell amid concern government steps to rein in lending will hurt economic growth. GDP expanded 10.7 percent while consumer prices rose a higher-than-estimated 1.9 percent last month from a year earlier, according to government data on Jan. 21.
Industrial & Commercial Bank of China Ltd, the nation’s biggest lender by market value, lost 2.6 percent to HK$5.70. China Construction Bank Corp, the second-biggest lender, slipped 3.6 percent to HK$5.98.
The nation’s central bank on Jan. 12 raised the reserve requirement for banks and guided higher yields for treasury bills at auctions earlier this month.
Chinese banks have begun restricting new loans after the China Banking Regulatory Commission said lenders that failed to meet some regulatory requirements have been told to limit lending.
The Shanghai Composite Index slumped 4.5 percent, the biggest weekly fall since the period ended on Nov. 27.
Bank of China dropped 3.6 percent to HK$3.75 in Hong Kong. The Beijing-based lender, which is planning a 40 billion yuan (US$5.9 billion) convertible bond sale in China, told analysts on Monday it could raise additional capital by selling new shares in Hong Kong.
Speculation also mounted that India will tighten monetary policy to prevent its economy from overheating. India’s Sensitive Index added 0.3 percent in the week as the Reserve Bank of India said on Thursday that inflation has become a “major concern.”
The central bank on Friday raised the reserve requirement for banks to 5.75 percent from 5 percent.
TAIPEI
The TAIEX index dropped 3.6 percent last week, extending the previous week’s 5.1 percent slide.
Other regional markets:
KUALA LUMPUR: Malaysian shares fell 5.35 points, or 0.42 percent to 1,259.16.
JAKARTA: Indonesian shares lost 8.78 points or 0.34 percent to 2,610.79.
MANILA: Philippine shares fell 0.28 percent, or 8.44 points, to 2,953.19.
WELLINGTON: New Zealand shares lost 0.60 percent, or 18.95 points, to 3,164.65.
MUMBAI: Indian shares added 0.31 percent, or 51.09 points, to 16,357.96.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS