Asian stocks drop as China raises bank reserves
Tuesday, 4 May 2010
SINGAPORE, May 3 (AP): Asian stocks fell Monday after China ordered banks to raise their reserves, the latest in a series of moves aimed at curbing inflation and surging property prices. European shares opened lower.
Hong Kong's Hang Seng index led decliners, falling 297.23 points, or 1.4 per cent, to 20,811.36 while South Korea's benchmark dropped 1.2 per cent to 1,721.21.
Singapore and India each slid 0.9 per cent and Australia skidded 0.5 per cent after the government said it would impose a new tax on the profits of mining companies. Malaysia's stock index was steady while Indonesia dropped 0.5 per cent.
As trading got started in Europe, the FTSE 100 index of leading British shares was down 1.1 per cent while France's CAC-40 index fell 0.6 per cent and Germany's DAX dropped 0.3 per cent. Stock futures pointed to modest gains on Wall Street.
Trading volume was light in Asia as the two biggest markets, Japan and China, were closed for holidays. Markets in Thailand and the Philippines were also closed.
The People's Bank of China said Monday that the deposit reserve requirement ratio for most banks will be raised half a percentage point, starting May 10. This is the third time this year that the central bank has raised the deposit reserve minimum.
Global shares dropped despite European governments and the International Monetary Fund announcing Sunday they agreed on euro110 billion ($145 billion) in emergency loans for debt-ridden Greece on the condition Athens make painful budget cuts and tax increases.
After surging last year, Asian stock markets will likely trade sideways for the next few months as traders monitor whether economic growth in the US and Europe continues as interest rates raise and government stimulus spending eases, said Timothy Wong, head of group research at DBS bank in Singapore.
"Investors are uncertain what the catalysts are going to be for the markets to more higher," Wong said. "For the markets to move higher, you would need much higher export growth, which would be a function of what's happening in the US and Europe."
In currencies, the dollar rose to 93.98 yen from 93.91 yen while the euro fell to $1.3230 from $1.3338.
Benchmark crude for June delivery was down 8 cents to $86.07 a barrel after the contract rose 98 cents to settle at $86.15 Friday.
In the US Friday, the Dow fell 158.71, or 1.4 per cent, to 11,008.61. The Standard & Poor's 500 index declined 20.10, or 1.7 per cent, to 1,186.68, while the Nasdaq composite index dropped 50.73, or 2.0 per cent, to 2,461.19.
Hong Kong's Hang Seng index led decliners, falling 297.23 points, or 1.4 per cent, to 20,811.36 while South Korea's benchmark dropped 1.2 per cent to 1,721.21.
Singapore and India each slid 0.9 per cent and Australia skidded 0.5 per cent after the government said it would impose a new tax on the profits of mining companies. Malaysia's stock index was steady while Indonesia dropped 0.5 per cent.
As trading got started in Europe, the FTSE 100 index of leading British shares was down 1.1 per cent while France's CAC-40 index fell 0.6 per cent and Germany's DAX dropped 0.3 per cent. Stock futures pointed to modest gains on Wall Street.
Trading volume was light in Asia as the two biggest markets, Japan and China, were closed for holidays. Markets in Thailand and the Philippines were also closed.
The People's Bank of China said Monday that the deposit reserve requirement ratio for most banks will be raised half a percentage point, starting May 10. This is the third time this year that the central bank has raised the deposit reserve minimum.
Global shares dropped despite European governments and the International Monetary Fund announcing Sunday they agreed on euro110 billion ($145 billion) in emergency loans for debt-ridden Greece on the condition Athens make painful budget cuts and tax increases.
After surging last year, Asian stock markets will likely trade sideways for the next few months as traders monitor whether economic growth in the US and Europe continues as interest rates raise and government stimulus spending eases, said Timothy Wong, head of group research at DBS bank in Singapore.
"Investors are uncertain what the catalysts are going to be for the markets to more higher," Wong said. "For the markets to move higher, you would need much higher export growth, which would be a function of what's happening in the US and Europe."
In currencies, the dollar rose to 93.98 yen from 93.91 yen while the euro fell to $1.3230 from $1.3338.
Benchmark crude for June delivery was down 8 cents to $86.07 a barrel after the contract rose 98 cents to settle at $86.15 Friday.
In the US Friday, the Dow fell 158.71, or 1.4 per cent, to 11,008.61. The Standard & Poor's 500 index declined 20.10, or 1.7 per cent, to 1,186.68, while the Nasdaq composite index dropped 50.73, or 2.0 per cent, to 2,461.19.