Asian stocks fell on Friday, led by Chinese shares as measures to shore up the market failed to stop margin traders from unwinding positions at a record pace and investors awaited Greece’s referendum.
The TAIEX slipped 0.22 percent, or 21.01 points, to 9,358.23.
The Shanghai Composite Index capped its steepest three-week slide since 1992, falling 5.8 percent on Friday. BHP Billiton Ltd lost 1.5 percent in Sydney, dragging commodity producers to the largest declines on the regional gauge. China Resources Land Ltd (華潤置地) dropped 4 percent in Hong Kong as just eight of 50 shares on the Hang Seng Index advanced.
The MSCI Asia Pacific Index slipped 0.4 percent to 146.36 as of 5:03pm in Tokyo. The measure is headed for a 1 percent decrease this week. With the Shanghai gauge tumbling more than twice as fast as any other index worldwide, regulators have pledged to investigate market manipulation and unveiled measures to revive confidence among the nation’s 90 million individual investors.
“For now, the mood is verging on panic, and it is extremely hard to calm a bear who is in a rage,” IG Asia Pte Singapore-based strategist Bernard Aw said. “Chinese brokers may still be looking at reducing their risk exposure by closing more margin debt.”
The outstanding balance of margin loans on the Shanghai Stock Exchange dropped for a ninth day on Thursday, sliding to 1.29 trillion yuan (US$207.8 billion) in the longest stretch of declines since the city’s bourse began compiling the data. A fivefold surge in borrowing had helped propel the gauge to a 150 percent advance in the 12 months through June 12.
Markets across Asia on Monday will be the first to react to the result of Greece’s vote. Greek Prime Minister Alexis Tsipras is calling for a rejection of creditors’ demands, and polls suggest it is too close to call. Greek Minister of Finance Yanis Varoufakis said he would quit if voters back austerity.
Two days after Greece missed a payment to the IMF, the Washington-based global lender of last resort said the country needs at least a further 36 billion euros (US$40 billion) from the eurozone over the next three years and easier terms to make the debt sustainable.
“As we head into the referendum, it seems investors are growing increasingly nervous,” IG Ltd Melbourne-based market strategist Stan Shamu said. “Traders will need to buckle up for a tumultuous Monday.”
The Hang Seng Index fell 0.8 percent and the Hang Seng China Enterprises Index declined 1.4 percent. Australia’s S&P/ASX 200 Index slipped 1.1 percent and New Zealand’s NZX 50 Index was little changed. South Korea’s KOSPI index fell 0.1 percent and Singapore’s Straits Times gained 0.4 percent.
Japan’s TOPIX index added 0.2 percent, paring this week’s drop to 0.9 percent.
The S&P 500 Index ended the shortened week down by 1.2 percent, the biggest weekly loss since March, after closing little changed on Thursday. The monthly US labor report indicated job creation advanced last month, while pay stagnated and the size of the workforce receded.
US employers added 223,000 jobs last month following a 254,000 increase in May that was less than previously estimated, US Department of Labor figures showed on Thursday. The jobless rate fell to a seven-year low of 5.3 percent as more people left the labor force.
Earnings at private employers held at US$24.95 per hour on average last month and rose by 2 percent over the past 12 months, matching the mean since the current expansion began six years ago. Wages had increased 2.3 percent in the year ended in May.
The participation rate, which indicates the share of working-age people in the labor force, decreased to 62.6 percent, the lowest level since October 1977.
In other markets on Friday:
Wellington edged down 0.01 percent, or 0.58 points, to 5,840.89. Air New Zealand slipped 0.77 percent to NZ$2.57 and Fletcher Building was off 1.10 percent at NZ$8.07.
Manila fell 0.57 percent, or 43.01 points, to 7,535.30.
Philippine Long Distance Telephone was unchanged at 2,800 pesos, Ayala Land fell 2.26 percent to 36.80 pesos and Universal Robina was down 0.05 percent at 193.80 pesos.
Mumbai rose 0.53 percent, or 146.99 points, to close at 28,092.79.
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