Asian markets swing through day before ending lower

HONG KONG : Asian markets mostly fell at the end of another volatile session on Tuesday, a day after a global rout that saw trading suspended in Chinese markets and US and European equities tank.

In echoes of the summer’s turbulence that saw trillions wiped off valuations, most bourses in the region tumbled in the first few minutes of trade before bouncing in and out of positive territory throughout the day.

The selling on Monday was fuelled by gauges of Chinese factory activity contracting again in December, the latest evidence showing the world’s number-two economy struggles with its lowest annual growth rates in 25 years.

The data combined with the expiration on Friday of “circuit breaker” measures brought in to curb last year’s share slump sent Shanghai stocks crashing almost seven percent.

Regulators halted trading early on Monday, the first day a new circuit breaker mechanism was in place.

“The main reason for yesterday’s fall was concern that China’s economy won’t steadily pick up. The circuit breaker was more of an accelerant for the fall,” Northeast Securities analyst Shen Zhengyang told AFP.

On Tuesday the market watchdog, the China Securities Regulatory Commission (CSRC), sought to calm the panic by defending the measure.

“The circuit breaker has a big impact in stabilising the market and its main function is to provide a ‘cooling off period’ for the market to avoid or reduce rushed decisions made during wide swings,” it said in a statement on its verified microblog.

Shanghai fell a further three percent at the open Tuesday before swinging from red to green and finally ending 0.3 percent lower.

The losses came despite the central People’s Bank of China injecting billions of dollars into financial markets to boost liquidity.

Hong Kong was 0.5 percent lower in the afternoon, having also enjoyed healthy buying spells. Tokyo ended down 0.4 percent on the back of a stronger yen.

Agencies

 

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