People wait for a traffic light to change in front of an electronic stock indicator of a securities firm in Tokyo on April 13, 2015. Asian markets mostly retreated Monday, April 20, following losses on Wall Street as fears over Greece returned. AP PHOTO/SHIZUO KAMBAYASHI
HONG KONG–Asian markets mostly retreated Monday following losses on Wall Street as fears over Greece returned, while Shanghai and Hong Kong tumbled after Chinese authorities unveiled restrictions on dealers borrowing cash to trade shares.
The mainland clampdown, announced Friday, offset news at the weekend that the Chinese central bank had reduced the amount of cash which banks must keep in reserve–a bid to boost loan activity.
Shanghai sank 1.64 percent, or 70.22 points, to 4,217.08 and Hong Kong fell 2.02 percent, or 558.19 points, to 27,094.93. Sydney shed 0.76 percent, or 44.8 points, to close at 5,833.1.
Tokyo was marginally lower, easing 18.39 points to 19,634.49, but Seoul closed 0.15 percent higher, adding 3.21 points to 2,146.71.
The People’s Bank of China Sunday announced it would cut one percentage point off the reserve ratio requirement, the second reduction this year and the latest monetary easing measure aimed at kickstarting growth in the world’s No. 2 economy.
It has also cut interest rates twice since November.
However, on Friday the China Securities Regulatory Commission announced tighter rules on margin trading–where investors buy shares mostly with borrowed money–which has helped propel the recent rally.
At the same time authorities made it easier to short-sell, or bet against stocks.
The Hong Kong and Shanghai share markets have been soaring as investors speculate that Chinese leaders will continue to loosen monetary policy to counter a sharp slowdown.
“Investors are taking profits in China,” said Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank.
“The clampdown initiated by securities regulators is adding to the sell-off and the weak investor sentiment is spreading to other markets in the region,” he told Bloomberg News.
Shanghai has more than doubled over the past year, while Hong Kong has surged about 18 percent this year.
On Wall Street Friday the Dow sank 1.54 percent, the S&P 500 fell 1.13 percent and the Nasdaq dropped 1.52 percent on fears about Greece’s future in the eurozone as it struggles to secure the release of much-needed bailout cash.
‘Uncharted waters’
Athens was told Saturday to urgently deliver a detailed fiscal and debt plan to official lenders, while European Central Bank chief Mario Draghi cautioned that not reaching an agreement would take the situation into “uncharted waters.”
There are fears that if the country does not service its huge debts it will default and tumble out of the eurozone, fueling worries about the knock-on effects for the global economy.
European stocks fell sharply Friday, with Germany’s DAX 30 index tumbling 2.58 percent and France’s CAC 40 in Paris down 1.55 percent.
On foreign exchange markets the euro edged down to $1.0790 and 128.10 yen from $1.0810 and 128.49 yen in New York Friday.
The dollar fetched 118.71 yen compared with 118.86 yen.
Oil prices were higher. US benchmark West Texas Intermediate for May delivery gained 44 cents to $56.18 while Brent crude for June added 28 cents to $63.73.
Gold fetched $1,200.30 against $1,205.91 late Friday.
In other markets:
— Mumbai fell 1.95 percent, or 555.89 points, to end at 27,886.21.
Reliance Industries fell 4.46 percent to 885.55 rupees, while Sun Pharamceutical Industries rose 0.66 percent to 1,044.10 rupees.
— Jakarta closed down 0.18 percent, or 9.84 points, to 5,400.80.
Palm oil producer Astra Agro Lestari fell 1.19 percent to 22,825 rupiah, while lender Bank Negara Indonesia rose 1.77 percent to 7,175 rupiah.
— Bangkok closed down 0.42 percent, or 6.53 points, at 1,560.32.
Oil company PTT fell 2.49 percent to 352 baht, while Siam Commercial Bank dropped 2.57 percent to 170.50 baht.
— Malaysia’s main index gained 0.15 percent, or 2.80 points, to close at 1,848.66.
Telekom Malaysia added 0.68 percent to 7.40 ringgit, Tenaga rose 0.55 percent to 14.52 while Maybank eased 0.11 percent to 9.48 ringgit.
— Singapore fell 0.62 percent, or 21.94 points, to close at 3,503.25.
Singapore Airlines rose 0.50 percent to Sg$12.00, while Singapore Telecom fell 1.12 percent to Sg$4.41.
— Wellington fell 0.63 percent, or 37.21 points, to 5,824.28.
Air New Zealand was down 0.72 percent at NZ$2.76 and Chorus was off 0.33 percent at NZ$3.02.
— Taipei fell 0.19 percent, or 18.08 points, to 9,552.85.
Taiwan Semiconductor Manufacturing Co. edged up 0.35 percent to Tw$143.0 while Cathay Financial Holding was 0.59 percent lower at Tw$50.3.
— Manila slipped 1.03 percent, or 81.62 points, to 7,865.27.