29th Jun 2015 09:29
CANBERA (Alliance News) - Asian shares fell across the board on Monday after Greece shut its banking system and imposed capital controls to halt bank runs following unsuccessful talks with its creditors on a debt deal. As heightened fears of a Greek default and its possible exit from the euro zone sparked a flight to safety, investors shrugged off Chinese interest rate and reserve ratio cuts over the weekend.
Chinese shares crashed further to enter bear market territory despite a surprise interest rate cut at the weekend. After a roller coaster ride, the benchmark Shanghai Composite index closed down 139.84 points or 3.34% at 4,053.03, extending losses from the past two weeks.
The index rose 2.5% in early trade after China's central bank surprised the markets with some aggressive monetary easing over the weekend. Later, the benchmark index fell as much as 7.6% before recouping some of its loss to end the session off its day's lows. Hong Kong's Hang Seng index, meanwhile, fell 696.89 points or 2.61% to 25,966.98.
China's central bank cut interest rates by 25 basis points, its fourth rate cut since last November, in a bid to stabilize the stock market and boost investor confidence in the economy. Besides, the central bank also cut the amount of reserves certain banks are required to hold by 50 basis points in a bid to boost lending.
Japanese shares fell to a more than one-week low after Greece unexpectedly called for a referendum on the final EU offer for a five-month extension of the country's bailout program. The yen gained ground on risk aversion and economic reports painted a mixed picture of the economy, further dampening investor sentiment.
Japan's industrial output dropped more than forecast in May, official data showed today, adding to fears the economy may have slowed sharply in the current quarter. Output fell 4% from a year earlier, the most in nearly two years, while production dipped 2.2% from the previous month, falling at the fastest pace in three months.
Retail sales, however, rose 3.0% in May from a year earlier, marking the second straight month of increase. The benchmark Nikkei average slumped 596.20 points or 2.88% to 20,109.95, the weakest closing level since June 19, while the broader Topix index closed down 2.53% at 1,624.82, with all of its 33 subsectors closing in negative territory.
Among the worst performers, Mazda Motor, Nippon Soda, Nippon Electric and Takashimaya fell 4-6%. Banks Mitsubishi UFJ Financial, Mizuho Financial and Sumitomo Mitsui Financial lost 3-4%. Semiconductor test equipment supplier Advantest retreated 4.4%, electronics maker Panasonic shed 3.7%, apparel retailer Fast Retailing dropped 3%, camera maker Canon fell 2.8% and automaker Honda Motor declined 2.7%.
Australian shares fell sharply as investors grew nervous about the contagion effects of the Greek debt crisis to peripheral markets. The benchmark S&P/ASX 200 index tumbled 123.40 points or 2.23% to 5,422.50, its lowest level since January, after closing down about 1.5% on Friday. The big four banks fell between 2.3% and 3.1%.
Miners BHP Billiton, Rio Tinto and Fortescue Metals Group lost 2-3% as the price of iron ore continued to trend towards the USDUS60 a ton mark. Newcrest Mining shares rose 1.2% and rival Evolution Mining soared nearly 4% after gold jumped along with prices of other safe-haven assets on speculation that Greece's euro membership is in jeopardy.
Oil & gas producer Oil Search shed 0.6%, Woodside Petroleum retreated 2.4% and Santos dropped 1.4% as oil prices fell in Asian deals on fears of a Greek debt default and amid concerns that a final nuclear agreement between Western powers and Iran over the country's nuclear program would exacerbate a global over-supply.
Law firm Slater and Gordon plummeted 25% after admitting reporting errors at its UK business for more than three years. Shares of GWA Group slumped 5.1%. The bathroom and kitchen fixtures supplier has downgraded its earnings guidance and announced a restructuring, which is expected to cost USD7-$9 million.
Seoul shares fell the most in a one month on foreign fund selling. The benchmark Kospi average shed 29.77 points or 1.42% to close at 2,060.49, marking its biggest single-day loss since May 27. While brokerages and logistics companies led the decliners, market heavyweight Samsung Electronics rose 0.2% and its smaller rival SK Hynix advanced 1.4%.
New Zealand shares joined a global selloff after last-ditch debt talks between Greece and its international creditors collapsed over the weekend. The benchmark NZX-50 index dropped 49.63 points or 0.86% to 5,705.81, a five-month low.
Cloud accounting software provider Xero tumbled almost 4% to its lowest level since late February, while Air New Zealand, Pacific Edge, Metlifecare and Warehouse Group all fell around 3% each. Energy stocks bucked the downward trend as investors thronged to safe-haven high-yielding stocks. Meridian Energy rallied 2.9% and Mighty River Power shares advanced 1.9%.
Elsewhere, the benchmark indexes in India, Indonesia, Malaysia and Singapore were down between 0.7% and 1.1%, while the Taiwan Weighted average tumbled 2.4%.
Singapore's producer prices plunged 8.3% year-over-year in May, following a 7.9% decrease in April, a government report showed. Producer prices have been falling since May last year.
US stocks closed mixed on Friday as investors digested strong consumer confidence data and awaited resolution on the Greece debt talks. The tech-heavy Nasdaq slid 0.6% and the S&P 500 edged down marginally, while the Dow rose 0.3%, boosted by Nike shares after the world's largest footwear maker reported a better-than-expected quarterly profit.
Copyright RTT News/dpa-AFX