China's Plunge Sends Asia Stocks to Biggest Loss This Year
Chinese shares plunged after a sell rating from the its largest brokerage was seen as government’s intention to slow down rally.
(Bloomberg) -- Stock markets across Asia sank as concerns surrounding global growth mounted, with the region’s benchmark index set for its biggest plunge of the year. Chinese shares plunged the most as traders took a sell rating from the nation’s largest brokerage as a sign that the government wants to slow down the rally.
The MSCI Asia Pacific Index dropped 1.4 percent as of 5:39 p.m. in Hong Kong as China’s trade slumped amid continued uncertainty from the trade war, with exports falling and imports weakening in February. This came after Europe’s growth forecast was slashed by the region’s central bank Thursday. With the first back-to-back losses of the year for the Asian benchmark, the region’s equities erased $384 billion in 10 trading days.
The worries were exacerbated as People’s Insurance Company (Group) of China Ltd., which had become a poster child of the ramp-up in equities, saw its A shares dive by the 10 percent daily limit. Citic Securities Co. advised clients to sell the shares, saying they are “significantly overvalued” and could decline more than 50 percent over the next year. The Shanghai Composite Index nosedived 4.4 percent, the most since Oct. 11.
“What we have today is the pressure from the cycle,” Min Lan Tan, head of the chief investment office for Asia Pacific with UBS Group AG’s wealth-management unit, said in an interview with Bloomberg Television. “A lot of this comes about because of the uncertainty with regards to the trade situation. The reason why market and policy makers were so surprised by the downdraft in recent data was because of the trade uncertainty."
STOCK MARKETS
- MSCI Asia Pacific Index down 1.4%
- Japan’s Topix index down 1.8%; Nikkei 225 down 2%
- Hong Kong’s Hang Seng Index down 1.9%; Hang Seng China Enterprises down 2.6%; Shanghai Composite down 4.4%; CSI 300 down 4%
- Taiwan’s Taiex index down 0.7%
- South Korea’s Kospi index down 1.3%; Kospi 200 down 1.4%
- Australia’s S&P/ASX 200 down 1%; New Zealand’s S&P/NZX 50 little changed
- India’s S&P BSE Sensex Index down 0.1%; NSE Nifty 50 down 0.2%
- Singapore’s Straits Times Index down 1%; Malaysia’s KLCI down 0.4%; Philippine Stock Exchange Index down 1.1%; Jakarta Composite down 1.2%; Thailand’s SET down 0.2%; Vietnam’s VN Index down 0.9%
- S&P 500 e-mini futures down 0.3% after index closed down 0.8% in last session
INDUSTRIES
| MSCI Asia Pacific Index sector | Move |
|---|---|
| Finance | -1.9% |
| Tech | -1.7% |
| Materials | -1.5% |
| Industrials | -1.4% |
| Communication services | -1.4% |
| Energy | -1.2% |
| Consumer discretionary | -1.1% |
| Utilities | -1.0% |
| Health care | -1.0% |
| Consumer staples | -0.6% |
ELSEWHERE IN MARKETS
- Yen strengthens 0.5% to 111.08 against U.S. dollar
- Offshore yuan little changed at 6.7326 against U.S. dollar; onshore yuan weakens 0.1%
- Bloomberg Dollar Spot Index down 0.2%; 10-year Treasury yield little changed at 2.63%
- Australian dollar strengthens 0.1% to 0.7024 against U.S. dollar; 10-year government-bond yield down 6bps to 2.03%
- WTI down 1% to $56.09 a barrel; Brent down 1.4% to $65.36
- Spot gold up 0.7% to $1,294.48 an ounce
ALSO READ
- Global Markets Wrap: NI GLOBEWRP
- Markets Live Blog: NI MLIV
- Inside Asia: NI INASIA
- Asia Stock Movers: NI ASMOVERS
--With assistance from Livia Yap.
To contact the reporters on this story: Natalie Lung in Hong Kong at flung6@bloomberg.net;Eric Lam in Hong Kong at elam87@bloomberg.net
To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Chua Baizhen
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