Asian stocks slip on Chinese selloff
TOKYO, Nov 30 — Asian stocks fell after Chinese shares posted the biggest one-day selloff in three months. Material and consumer-staple shares led losses on the benchmark index at the start of a pivotal week for the region’s markets.
The MSCI Asia Pacific Index lost 0.3 per cent to 132.82 as of 9:02 a.m. in Tokyo, headed for a monthly loss of 1.2 per cent, its sixth such decline in seven months. This week brings a decision by the European Central Bank and the last reading on U.S. jobs before the Federal Reserve decides on whether to raise interest rates in December. The Shanghai Composite Index dropped 5.5 per cent on Friday, its largest retreat since the depths of a market rout in August, as regulators clamped down on brokerages.
“The main event is the ECB moving on Thursday and the U.S. non-farm payrolls on Friday,” said Mark Matthews, head of Asia research and a managing director of Bank Julius Baer & Co. in Singapore. Friday’s move in Chinese markets was “a positive because they were investigating brokers, which is a sign they don’t want another bubble to form, which was happening as it was up about 25 per cent just in the last couple of months. It was oversold on Friday and I would expect it to bounce today.”
Japan’s Topix index lost 0.3 per cent. Data Monday showed a preliminary reading for industrial production rose less than economists estimated in October compared with the previous month, while retail sales climbed more than they had expected.
Regional gauges
Australia’s S&P/ASX 200 Index added 0.1 per cent. Dick Smith Holdings Ltd. plunged 47 per cent in Sydney after the electronics retailer said it sees a A$60 million ($43 million) writedown and abandoned its profit forecast.
New Zealand’s S&P/NZX 50 Index increased 0.4 per cent. South Korea’s Kospi index fell 0.8 per cent. Futures on Hong Kong’s Hang Seng Index added 0.3 per cent in most recent trading, while contracts on the FTSE China A50 Index slid 0.2 per cent.
China’s securities regulator is investigating Citic Securities Co., Haitong Securities Co. and Guosen Securities Co. over alleged breaches of rules on margin and short-selling contracts. Shares of Chinese brokerages led the decline on Friday.
E-mini futures on the Standard & Poor’s 500 Index fell 0.2 per cent after the underlying gauge climbed 0.1 per cent on Friday in a shortened session. As investors await payrolls figures for November, traders are now pricing in a 72 per cent chance the Federal Reserve will raise interest rates in December.
ECB meeting
European policy makers meet Dec. 3 to discuss monetary policy and what the ECB can do to prop up sluggish inflation within the region. The central bank is considering cutting its deposit rate further below zero and adding to its program of quantitative easing.
International Monetary Fund Managing Director Christine Lagarde and some two dozen officials on the fund’s executive board gather Monday in Washington to decide whether to grant China’s yuan status as a reserve currency by adding it to the fund’s Special Drawing Rights basket. While Lagarde has already announced that fund staff had recommended the yuan be included and that she supported the finding, the IMF is likely to give more details on how it arrived at the decision.
This week also sees a policy decision from the Reserve Bank of Australia, while members of the Organization of Petroleum Exporting Countries will gather in Vienna. — Bloomberg
