Asian markets yesterday posted sharp losses after falls in US tech stocks and as concerns over China’s property sector weighed on sentiment.
Leading the losers in Hong Kong — where shares closed down more than 1 percent — was developer Country Garden Holdings Co (碧桂園), after it missed bond payments and warned of multibillion-dollar losses, deepening concerns over China’s heavily indebted real estate sector.
Country Garden shares were down more than 18 percent at the close, days after its billionaire boss Yang Huiyan (楊惠妍) said the firm was “facing the greatest difficulties since our establishment.”
Photo: EPA-EFE
Like its heavily indebted competitor Evergrande Group (恆大集團), any collapse of Country Garden would have catastrophic repercussions for the Chinese financial system and economy.
Fears for Chinese property companies were causing regional markets’ gradual decline, SPI Asset Management managing partner Stephen Innes wrote in a note.
“This negative sentiment has spread to other Asian markets, resulting in a generally subdued atmosphere across all exchanges,” he said.
The TAIEX closed down 207.59 points, or 1.25 percent, at 16,393.66.
The financial sector led the downturn in the wake of the Chinese property behemoth’s woes, and the bellwether electronics sector also struggled as investors dumped large-cap tech stocks after a sell-off of their US counterparts on Friday, dealers said.
The Hang Seng Index lost 1.58 percent, or 301.64 points, to 18,773.55, while the Shanghai Composite Index fell 0.34 percent, or 10.82 points, to 3,178.43.
Singapore dipped by more than 1 percent, Tokyo closed down by a similar amount and Manila also closed in the red.
European stocks mostly climbed yesterday, recovering from pre-weekend losses, although traders were keeping a wary eye on the risks for China’s property sector.
Frankfurt and Paris were up in early exchanges, although London was trading lower.
Stock markets had wavered on Friday after US data showed a larger-than-expected rise in wholesale inflation, with traders weighing the likelihood of more interest rate hikes this year.
This week, all eyes would be on a US retail sales report for last month and the minutes of the July 26 Federal Open Market Committee meeting.
Additional reporting by CNA
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