Citic Securities Co., China’s biggest brokerage, jumped 13 percent in Hong Kong, heading for its first gain in six days. China Life Insurance Co. gained 5 percent after UBS AG raised its rating on the nation’s largest insurer to buy from neutral. Honda Motor Co. slipped 1.8 percent as Japanese exporters retreated after the yen jumped on Wednesday amid China’s rout.
The MSCI Asia Pacific Index was little changed at 139.63 as of 11:18 a.m. in Hong Kong, swinging between a gain of 0.7 percent and a loss of 1.7 percent. China’s securities regulator banned major shareholders, corporate executives and directors from selling stakes in listed companies for six months, its latest effort to stem an equities decline that’s erased more than $3 trillion of value. The Shanghai Composite Index climbed 0.5 percent after dropping as much as 3.8 percent.
“The Chinese government is trying their best to provide support in that market,” James Lindsay, who helps manage the equivalent of about $3 billion in assets at Nikko Asset Management NZ Ltd. in Auckland, said by phone. “The selloff is affecting other markets, such as commodities. That combined with investor nervousness around Greece creates more volatility.”
China’s measures are a sign of desperation and will fuel fear among investors, said Mark Mobius, executive chairman of the Templeton Emerging Markets Group.
Government SupportThe Shanghai Composite slumped to a three-month low on Wednesday as another round of government support steps failed to allay concern that investors who borrowed to buy shares will keep unwinding those trades at a record pace. The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong, climbed 2.9 percent today, while the benchmark Hang Seng Index rose 3.1 percent, after falling the most since November 2008 on Wednesday.
Chinese inflation rose faster than economists forecast in June, suggesting a stabilization in demand that’s now threatened by the stock market’s rout. The Federal Reserve registered concern over China as early as last month, with meeting minutes signaling potential risks to the U.S. from there and Greece.
Japan’s Topix index slipped 1.2 percent, paring a decline of as much as 3.6 percent. South Korea’s Kospi index fell 0.6 percent. New Zealand’s NZX 50 Index slid 0.8 percent. Australia’s S&P/ASX 200 Index dropped 0.4 percent.
Greece is rushing to pull together a blueprint of reforms to convince European leaders headed by German Chancellor Angela Merkel that it can keep the euro. The government extended capital controls to Monday and Prime Minister Alexis Tsipras has until midnight Thursday to come up with an economic plan that will cut spending in exchange for a new European bailout.
E-mini futures on the Standard & Poor’s 500 Index rose 0.5 percent today. The underlying U.S. equity benchmark index sank 1.7 percent on Wednesday.
Courtesy: Bloomberg Business 9 July 2015