Asia markets mostly up, Shanghai hit by trading crackdown

A man checking share prices is reflected on the electronic board of a securities firm in Tokyo Monday, Jan. 19, 2015. Asian stock markets mostly rose Monday following a rally on Wall Street and a jump in oil prices, but Shanghai plunged almost eight percent after regulators punished three major brokerages for breaking rules. AP PHOTO/KOJI SASAHARA

HONG KONG–Asian stock markets mostly rose Monday following a rally on Wall Street and a jump in oil prices, but Shanghai plunged almost eight percent after regulators punished three major brokerages for breaking rules.

The euro continued to struggle against the dollar and yen before this week’s European Central Bank (ECB) meeting, which is expected to unveil a vast bond-buying scheme to kickstart the eurozone economy.

Tokyo rose 0.89 percent, or 150.13 points, to 17,014.29, Sydney gained 0.19 percent, or 9.86 points, to 5,309.1 and Seoul closed 0.77 percent higher, adding 14.49 points to 1,902.62.

However, Shanghai was hammered, diving 7.70 percent, or 260.15 points, to close at 3,116.35–its biggest fall since June 2008. Hong Kong fell 1.51 percent, or 365.03 points, to end at 23,738.49.

China aside, regional investors were given a positive lead from New York, where all three main indexes finished last week on a high thanks to a pick-up in oil prices.

The Dow rose 1.10 percent, the S&P 500 added 1.34 percent and the Nasdaq rallied 1.39 percent.

Crude gained after the International Energy Agency said there were signs “the tide will turn” in the market after prices tumbled toward six-year lows.

While it predicted that prices will fall in the short term, the Paris-based agency said it expected the market to rebalance in the second half of the year.

The comments sent US benchmark West Texas Intermediate (WTI) for February surging $2.44 Friday, while Brent for March jumped $2.50.

However, on Monday the two contracts retreated slightly. WTI eased 68 cents to $48.01 a barrel and Brent fell 53 cents to $49.64.

Blow to China market

In Shanghai shares plunged after the China Securities Regulatory Commission (CSRC) on Friday suspended three brokerages from opening new margin trading accounts for three months after they violated market rules.

The news was a blow for Chinese stocks, which surged more than 50 percent last year helped by an interest rate cut in November.

The market was also driven by ample liquidity and margin trading–when investors borrow funds to trade with only a small deposit.

The three brokerages–Citic Securities, Haitong Securities and Guotai Junan Securities–are among the country’s biggest.

“The CSRC’s punishment of the three brokerages for rule violations for margin trading business last Friday was a punch to the market,” BOC International analyst Shen Jun told AFP.

Eyes are now on the release Tuesday of Chinese economic growth data for 2014.

An AFP survey predicted expansion of 7.3 percent, down from 7.7 percent in 2013, which would be the slowest annual rate since 1990, a year after the Tiananmen Square crackdown.

On currency markets, the euro fetched $1.1563 and 135.42 yen, against $1.1566 and 135.87 yen in New York Friday.

The single currency is facing selling pressure before the ECB meeting on Thursday. Analysts are forecasting it will see the introduction of massive sovereign bond purchases, known as quantitative easing.

The scheme essentially entails the bank printing euros to boost lending and fight off deflation. However, with more cash in circulation, the value of the single currency falls.

On Friday, the unit sank below $1.1500 for the first time since November 2003.

The dollar changed hands at 117.11 yen, compared with 117.46 yen in New York Friday.

Gold fetched $1,275.51 an ounce, against $1,257.60 late Friday.

In other markets:

— Taipei rose 0.39 percent, or 35.77 points, to 9,174.06.

Taiwan Semiconductor Manufacturing Co. added 1.46 percent to Tw$139.0 while Hon Hai Precision Industry was 0.48 percent lower at Tw$83.7.

— Wellington added 0.38 percent, or 21.41 points, to 5,638.14.

Spark was up 2.63 percent at NZ$3.32 while Fletcher Building was down 0.62 percent at NZ$8.04.

— Manila was marginally lower, dipping 5.56 points to 7,485.32.

Universal Robina fell 0.6 percent to 198.80 pesos while Metrobank rose 2.24 percent to 91.40 pesos.

— Mumbai rose 0.50 percent, or 140.12 points, to end at 28,262.01.

Software major Wipro gained 5.26 percent to 584.45 rupees, while Hindustan Unilever fell 5.27 percent to 892.80 rupees.

— Bangkok rose 1.16 percent, or 17.63 points, to 1,535.37.

Bank of Ayudhya soared 9.73 percent to 62.00 baht, while Glow Energy gained 4.08 percent to 89.25 baht.

— Kuala Lumpur added 0.56 percent, or 9.74 points, to end at 1,753.31.

Malayan Banking gained 2.21 percent to 8.79 ringgit, Public Bank rose 0.46 percent to 17.64 while Sime Darby slipped 0.11 percent to 9.30 ringgit.

— Jakarta ended up 0.07 percent, or 3.71 points, at 5,152.09.

Auto maker Astra International gained 1.71 percent to 7,425 rupiah, while cement maker Semen Indonesia fell 6 percent to 14,100 rupiah.

— Singapore rose 0.21 percent, or 7.02 points, to close at 3,307.7.

Oil rig maker Keppel Corp. jumped 1.87 percent to Sg$8.18, while Singapore Airlines finished 1.73 percent lower at Sg$11.90.