Asian stocks held near four-year lows and crude oil prices approached a 20 percent drop in less than two weeks as investors worried over the extent of China’s economic slowdown and its impact on emerging markets.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged 0.4 percent higher but still stood near a four-year low touched on Monday, and was still down more than 8 percent since the start of 2016. It fell 12 percent last year.
Japan’s Nikkei share average opened on Tuesday (January 12), down 1.3 percent to 17470.93, after market holiday on Monday, hitting a three-month low and down over 8 percent so far this year. The broader Topix shed 16.91 points to 1430.41.
Investors in Japan returned to the market after a holiday on Monday to find oil prices were still crumbling and Chinese stocks were struggling after closing on Monday at their lowest since September.
South Korean shares pared sharp gains and edged up on Tuesday morning, with support from bargain-hunting locked in on recently volatile stocks and hopes for China taking bigger role in overseeing financial markets, soothing investor anxiety.
The Korea Composite Stock Price Index (KOSPI) was up 0.3 percent at 1,899.83 points as of 0227 GMT, after rising as much as 0.8 percent to 1,910.59.
China’s major stock indexes rose on Tuesday following reports of proposed reforms to strengthen the nation’s financial regulatory system.
The CSI300 index was up 1.2 percent at 3,229.69 points by 0142 GMT, after briefly dipping into the red, while the Shanghai Composite Index rose 0.7 percent to 3,036.39.
Chinese investors sentiment has been hit by the recent market volatility.
“I have a feeling that it’s the bearish market now. I have no idea of how the market goes. I think it looks like bearish now. Some stocks plunged so fast but they also rose too fast (last year). Someone has said that Chinese equity markets with so many stocks jumped too fast and too high, but when they decline, they would drop to the limit,” said 67-year-old investor Lu Weimin.
The Hang Seng index in Hong Kong was up 0.6 percent at 20,006.95.
The State Council has set up a working group, headed by deputy secretary-general Xiao Jie, a former vice finance minister and tax chief, to prepare for upgrading the cabinet’s financial department to bureau level, said a source close to the country’s leadership.
China’s cabinet is set to take on a bigger role in overseeing financial markets, as perceived missteps by existing regulators fuel concerns globally that Beijing may be losing its grip on policy as economic growth cools to its slowest in a quarter of a century.
Australian shares fell for the eight straight session on Tuesday as mounting losses in the resources sector swamped gains in defensive stocks such as banks and telecoms.
The S&P/ASX 200 index failed to hold even the slimmest of early rallies and slipped 0.3 percent, or 12.24 points, to 4,920.0.
That left the benchmark down around 7 percent on the year so far, its worst start on record.
Deep-seated concerns about the outlook for China and further pain for commodity prices offered no respite. (Reuters)
