By Sarah Turner and V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) -- Stocks in Hong Kong and Shanghai got
slapped Tuesday after several local Chinese governments imposed
further restrictions on home purchases, with the central bank's
move to curb liquidity in the money markets also weighing on
sentiment.
Japanese shares retreated as the yen sprang higher after the
nation's finance minister denied Tokyo was considering allowing
purchases of foreign bonds.
"Investors [are] struggling to rediscover the bullish tone that
has pushed many regional indices to multiyear highs," said
Perpetual Investments' investment market research chief Matthew
Sherwood.
The Hang Seng Index fell 1% in Hong Kong, while the Shanghai
Composite Index skidded 1.6% for its worst percentage drop since a
1.8% decline on Jan. 11.
Chinese property developers were hit hard on news local
governments in China have been moving to tighten home buyers'
access to credit.
Shares of Gemdale Corp. plunged 7.9% and Poly Real Estate Group
Co. sank 5.1% in Shanghai and China Vanke Co. (CVKEY) lost 4.3% in
Shenzhen; in Hong Kong, shares of China Resources Land Ltd.
(1109.HK) and China Overseas Land & Investment Ltd. (CAOVY)
shed 4.4% and 3.3%, respectively.
In another development that weighed on investor sentiment, the
People's Bank of China on Tuesday offered 28-day repurchase
agreements to drain 30 billion yuan ($4.8 billion) from the money
markets, its first move to pull out liquidity from the local money
markets in eight months.
Dariusz Kowalczyk, Crédit Agricole's senior economist, said the
move was a "hawkish signal" from the central bank, adding that
stocks in Shanghai fell following the move, "not surprisingly."
Elsewhere in the region, Japan's Nikkei Stock Average slipped
0.3%, giving back some of the gains made in the previous session,
when the benchmark jumped 2.1%.
South Korea's Kospi gained 0.2%, Taiwan's Taiex rose 0.2%, and
Australia's S&P/ASX 200 index edged up 0.4% to end at its
highest point since September 2008.
Casino operators listed in Hong Kong saw some big losses amid a
weakening outlook, with Deutsche Bank analysts saying that gaming
figures so far in February suggest revenue may only rise 2%
year-on-year this month, falling below market expectations for a
10% year-on-year rise.
"This may be partly luck-driven and partly due to less direct
VIP play at Melco Crown Entertainment Ltd. (MPEL), which is under
Taiwan investigation," the Deutsche Bank strategists said. "The
market may react negatively to soft Chinese New Year VIP data,"
they added.
Sands China Ltd. (SCHYY) dropped 4.4% and Galaxy Entertainment
Group Ltd. (0027.HK) shed 4.9%. Melco shares tumbled 5.5%.
Shares of SCMP Group Ltd. , publisher of the South China Morning
Post newspaper, plunged 7.4% after the firm said it was in talks
for an acquisition. The stock, however, is still up more than 22%
so far this year on gains recorded earlier, amid speculation the
firm could be taken private by shareholder Kerry Media Ltd,
controlled by Malaysian billionaire Robert Kuok.
The losses in Tokyo came after Japanese Finance Minister Taro
Aso said the government wasn't considering purchasing foreign
bonds, or changing the law that governs the Bank of Japan. The
country's Prime Minister Shinzo Abe had said Monday that if the
Bank of Japan fails to achieve its inflation target, then he might
change the central-bank law.
Currency-sensitive firms lost ground Tuesday along with the
dollar, with tech firms among the decliners. Tokyo Electron Ltd. ,
(TOELY) gave up 2.5%, while robotics firm Fanuc Corp. (FANUY)
dropped 4.1%.
Renesas Electronics Corp. (RNECY) rose 2% in the tech sector,
however, following a Nikkei news report saying the chip maker would
appoint a new president as early as this month.
Earnings were providing a boost for some firms, with tire maker
Bridgestone Corp. (BRDCF) up 10.4% after more than doubling its
quarterly profits and forecasting record earnings for 2013.
Earnings from Australian companies saw Mount Gibson Iron Ltd.
drop 3.9% after the iron-ore extractor said that its first-half
profit slumped to 37.1 million Australian dollars ($38.2 million)
from $129.9 million in the year-ago period.
Beverages firm Coca-Cola Amatil Ltd. rose 2% after updating
investors.
APN News & Media (APNDF) -- partly owned by Ireland's
Independent News & Media PLC -- slumped 8.3% as the mass
departure of the firm's chairman, chief executive officer and three
independent directors of the board took effect Tuesday morning,
following a spat on raising capital.
The departing directors wanted to announce a capital raising at
the same time as the firm's results announcement on Feb. 21, APN
said. However, shareholders Independent News & Media and Allan
Grey, holding around 51% of the firm's capital, are opposed to
raising capital at this time, it said.
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