Chinese stocks dived the most in over six years Monday, with a wide selloff sweeping across the financial sector as investors turned jittery over the latest move by securities regulators to clean up the margin-trading business.
In Japan, the Nikkei 225 index regained 150.13 points, or 0.9%, to 17,014.29, after Friday’s 200-point-plus slide.
In Hong Kong, the Hang Seng index plummeted 365.03 points, or 1.5%, to 23,738.49
Major underperformers included Haitong Securities (down 16.5%), Citic Securities (down 16.5%), Shenyin Wanguo HK Ltd. (down 15%), and China Galaxy Securities Co. (down 13.2%).
Among the real-estate names listed in Hong Kong, China Vanke Co. retreated 6.3%, China Overseas Land & Investment Ltd. lost 3.5%, and China Resources Land Ltd. dropped 3.1%.
CHINA
The Shanghai CS300 index erased 279.99 points, or 7.7%, to 3,355.16, posting its biggest daily percentage decline since June 2008.
Prior to Monday’s heavy loss, the index was up 4.4% for the month to date, extending gains after finishing 2014 with a sharp 53% advance.
The China Securities Regulatory Commission, the nation’s top market watchdog, announced Friday that a dozen brokerage firms had been punished for violations of margin-trading rules after a two-week overhaul. Infractions included allowing customers to delay margin repayments by longer than currently allowed.
The three most severely punished brokers were Citic Securities Co., Haitong Securities Co. and a unit of Guotai Junan International Holdings Ltd., which were all banned from opening new customer accounts for three months.
The A-shares of both Citic Securities which is owned by financial giant Citic Group, and Haitong Securities were suspended from trading after falling limit-down by 10%.
Other financial stocks, including banks and insurances, were also under heavy selling pressure in Shanghai.
China Citic Bank Corporation Ltd., another listed subsidiary of Citic Group, Bank of China Ltd. Industrial & Commercial Bank of China Ltd. and Agricultural Bank of China Ltd. all hit the 10% daily price-drop limit.
Among major insurers, China Life Insurance Co. Ltd. and Ping An Insurance Group Co. likewise saw their A-shares suspended after their price falls exceeded the daily limit.
Also affecting sentiment was a fresh fall in home prices across China’s major cities.
Among the Shanghai-listed shares of top mainland Chinese developers, both Gemdale Corp. and Poly Real Estate Group Co. gave up 10%.
In other markets;
The Kospi in Korea recovered 14.49 points, or 0.8%, to 1,902.62
In Taiwan, the Taiex index added 35.77 points, or 0.4%, to 9,174.06
In Singapore, the Straits Times Index eked up 7.02 points, or 0.2%, to 3,307.70
New Zealand’s NZX 50 index moved higher 21.41 points, or 0.4%, to 5,638.14
Australia’s S&P/ASX 200 gained 9.90 points, or 0.2%, to 5,309.14
