Asian markets fall as China liquidity concerns intensify
HONG KONG: Most Asian stock markets fell Thursday, led by a slide in Chinese shares as investors' concerns about liquidity intensified.
Keeping Score: The Shanghai Composite index skidded 1.1 percent lower to 3,207.13 and Hong Kong's Hang Seng shed 0.5 percent to 24,272.60. Tokyo's benchmark Nikkei 225 index lost 0.8 percent to 19,059.75 and South Korea's Kospi slipped 0.3 percent to 2,161.60. Australia's S&P/ASX 200 rose 0.4 percent to 5,896.20. Southeast Asian indexes were mixed.
Liquidity Issues: China's central bank refrained from open market operations for a fifth straight day, effectively siphoning money from the banking system. The People's Bank of China said in a statement that liquidity in the banking system was at a "relatively high level," the official Xinhua news agency reported.
Market Insight: "Definitely one of the problems is the liquidity problem at this moment, mainly driven by the People's Bank of China," said Dickie Wong, research director at Kingston Financial Group. He predicted that China would continue to hike interest rates this year, which would improve profit margins at Chinese banks and financial services, but investors might be tempted to sell their shares if earnings reports don't beat expectations, he said. "It gives the perfect reason for investors to sell on spec and pull back all of their money."
Samsung: Shares of the South Korean electronics giant rose after it unveiled its first major smartphone since the embarrassing recall of its fire-prone Note 7. The Galaxy S8 comes in two sizes but doesn't have more battery capacity, giving it more breathing room.
Toshiba Filing: The embattled Japanese company's shares jumped more than 4 percent after it said its US nuclear unit Westinghouse Electric filed for bankruptcy protection. The Chapter 11 petition is an important step for Toshiba as it fights to stop hemorrhaging losses at the ailing nuclear business, which has been hit with rising costs because of safety concerns and regulations, and rising anti-nuclear sentiment in some countries.
US Economy: In the latest encouraging sign for the US economy, a report by a real estate group said more people signed contracts to buy US homes last month. The pending home sales index climbed 5.5 percent in February to its second highest point since 2006. Optimism that hoping Congress and the White House will be able to enact President tax cuts and other business-friendly policy proposals has kept markets buoyant. But some of that optimism has dimmed recently weeks after Trump's plan to revamp healthcare failed to win enough votes.
Wall Street: Major US benchmarks finished little changed. The Dow Jones industrial average fell 0.2 percent to close at 20,659.32. The S&P 500 index added 0.1 percent to 2,361.13. The Nasdaq composite index gained 0.4 percent to 5,897.55.
Energy: Oil extended its rally. Benchmark US crude oil futures climbed 18 cents to $49.69 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.14, or 2.4 percent, to close at $49.51 a barrel on Wednesday. Brent crude, used to price international oils, added 10 cents to $52.63 a barrel in London.
Currencies: The dollar rose to 111.18 yen from 111.04 yen. The euro fell to $1.0754 from $1.0767.