Arab Today, arab today asian shares weak as shanghai sinks on credit woes
Last Updated : GMT 19:52:56
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Asian shares weak as Shanghai sinks on credit woes

Arab Today, arab today

Arab Today, arab today Asian shares weak as Shanghai sinks on credit woes

Hong Kong - AFP

Asian markets tumbled Monday, extending last week\'s falls after the US Federal Reserve indicated it could reel in its stimulus later in the year, while Hong Kong and Shanghai were stung by a liquidity crisis in China. However, the Fed\'s announcement that it could soon start winding down its bond-buying continued to provide support to the dollar, pushing it back towards 100 yen. Shanghai slumped 5.30 percent, or 109.86 points, to 1,963.24 -- below the psychological 2,000-point level analysts had pegged as support. Hong Kong lost 2.22 percent, or 449.33 points, to end at 19,813.98. Chinese investors have been sent running by a liquidity crisis in the banking system, which has caused lenders to put the brakes on loans. The rates banks charge to borrow from each other has surged in the past two weeks but the People\'s Bank of China has refrained from injecting more cash -- owing to fears about a growth of bad debt -- which has in turn weighed on the economy. Hopes that Beijing would step in to provide money were dashed at the weekend when a commentary by the official Xinhua news agency said there was no shortage of funds in the financial system. It blamed speculation and non-bank forms of lending, often called \"shadow finance\", for the problem. \"It\'s not that there\'s no money, it\'s that the money is not in the right places,\" the commentary said. Wu Bangdong, analyst at Changjiang Securities, said: \"A lack of policy stance from the central bank during the cash crunch is the main reason that stock markets keep falling,so investors are waiting eagerly for any direction cues.\" Tokyo\'s benchmark Nikkei index closed down 1.26 percent, or 167.35 points at 13,062.78. The losses reversed a 1.42 percent gain at the start of Monday\'s session that had been stoked by a solid victory for Prime Minister Shinzo Abe\'s ruling coalition in elections ahead of national upper house polls next month.\"Voters reaffirmed confidence in \'Abenomics\' and the ruling coalition government, which was symbolically important given the recent volatility seen in equities prices,\" Hirochi Nishi, general manager of equities at SMBC Nikko Securities, told Dow Jones Newswires. Abenomics refers to the big-spending policy put in place by Prime Minister Shinzo Abe that has been credited with a rallying stock market, weaker yen and a pick-up in economic growth. \"Leading up to the upper house elections in parliament in July, this should reassure investors that the course of present government economic policy will be maintained.\" Toyota fell 1.54 percent to 5,750 yen while Nintendo rose 1.86 percent to 10,950 yen. Mobile carrier SoftBank was up 0.71 percent to 5,600 yen after the path was cleared for it to push on with a $21.6 billion takeover of US wireless giant Sprint Nextel when a rival bid was dropped. Struggling electronics giant Sharp closed 2.66 percent lower at 401 yen. In the last hour of trading, the firm said it had completed the second part of a capital injection deal from US firm Qualcomm worth about 10.8 billion yen ($110 million). In Sydney, where a number of listed firms rely heavily on trade with China, the market closed down 1.47 percent, or 69.7 points, at 4,669.1, while Seoul skidded 1.31 percent, or 23.82 points, to 1,799.01. Wu Bangdong, analyst at Changjiang Securities, said: \"A lack of policy stance from the central bank during the cash crunch is the main reason that stock markets keep falling, so investors are waiting eagerly for any direction cues.\" The ruling Liberal Democratic Party (LDP) and New Komeito secured solid victories in the Tokyo metropolitan assembly election. The dollar bought 98.36 yen on Monday in Tokyo, compared with 97.87 yen in New York late Friday. The euro sat at 128.85 yen and $1.3099, against 128.45 yen and $1.3122. Oil prices slipped. New York\'s main contract, West Texas Intermediate light sweet crude for delivery in August, was down 52 cents at $93.17 a barrel and Brent North Sea crude for August delivery shed 71 cents to $100.20. Gold fetched $1,282.74 per ounce by 0820 GMT, from $1,293.33 late Friday. In other markets: -- Taipei ended down 0.45 percent, or 35.28 points, at 7758.03. -- Manila dived 3.42 percent, or 211.12 points, to 5,971.05. Philippine Long Distance Telephone fell 1.43 percent to 2,748 pesos while Metropolitan Bank and Trust slipped 6.91 percent to 105 pesos. -- Wellington ended flat, edging up 0.98 points to 4,364.05. Goodman Property was up 1.5 percent at NZ$1.04 and Precinct Properties added 0.5 percent to NZ$1.04. Sky Television fell 2.4 percent to NZ$4.96

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