MARKETS-GLOBAL/ASIA-CLOSE Asian stocks rebound but China stocks plummet

Record ID: 136030

  • Title: MARKETS-GLOBAL/ASIA-CLOSE Asian stocks rebound but China stocks plummet
  • Date: 25th August 2015
  • Summary: SEOUL, SOUTH KOREA (AUGUST 25, 2015) (REUTERS) CARS DRIVING ON SEOUL STREET PEOPLE WALKING ACROSS CROSSWALK INTERIOR OF DEALING ROOM AT KOREA EXCHANGE BANK ELECTRONIC BOARD SHOWING KOREA COMPOSITE STOCK PRICE INDEX (KOSPI) CLOSING AT 1846.63, UP 16.82 POINTS AND 0.92 PERCENT DEALERS WORKING DEALERS TALKING TO EACH OTHER MORE OF DEALERS WORKING DEALER TALKING ON THE PHONE/
  • Embargoed: 9th September 2015 13:00
  • Keywords:
  • Location: China
  • Country: China
  • Topics: General
  • Reuters ID: LVA4P5AC5BR2YRZCSO0ZLO5M9L47
  • Aspect Ratio: 16:9
  • Story Text: Chinese stocks tumbled again on Tuesday (August 25), despite a rebound in markets elsewhere in Asia, as investors despaired at the lack of policy action from Beijing in response to recent data suggesting the downturn in the world's second-largest economy is deepening.
    South Korean shares and the won rebounded on Tuesday after the North and South agreed to end a military standoff, but gains were capped as Chinese shares went into a tailspin late in the session.
    The Korea Composite Stock Price Index (KOSPI) ended up 0.92 percent at 1,846.63 points after rising as much as 1.9 percent to 1,864.30 early in the session. It snapped a six-straight-session losing streak.
    Australian shares also rebounded as investors picked up beaten-down bank stocks, a day after the market suffered its biggest drop in over six years.
    The S&P/ASX 200 index climbed 2.7 percent, or 136.0 points, to 5,137.3, recovering more than half of Monday's 4.1 percent drop.
    Early in the session, the benchmark briefly dipped below 5,000 for the first time in two years.
    Investors and traders were happy to see the markets bounce back.
    "Generally, I feel pretty good, I own stocks myself, it's always good to see a recovery, so happy to see things bounce back a little bit today," said Banker Jason Roxburgh.
    "I decided that the stock market is always going up and down. And now I'm more happy than three years ago when there was a global crash," Retiree Jim Fokas added.
    All of the big four banks chalked up gains of between 3.6 percent and 4.9 percent.
    Shares bounced back despite further heavy selling in Chinese stocks and ongoing worries about slowing growth in the world's second-biggest economy.
    "These stock market difficulties seem to be associated with a bit of a bubble in China, and fears about a slowing Chinese economy. The good thing is, that we haven't seen any ramifications from the stock market in capital markets more generally," Austalian Prime Minister Tony Abbott said.
    Major Chinese stock indexes nosedived more than 7 percent, hitting their lowest levels since December, following their more than 8 percent plunge on Monday that sent shockwaves through global financial markets.
    The Shanghai Composite Index closed at down 7.63 percent at 2964.97. The Shenzhen Component Index was down 7.04 percent at 10197.94.
    Hong Kong's flagship Hang Seng index, however, rose on Tuesday, breaking a seven-day losing streak, as investor sentiment improved amid a recovery in some regional markets.
    But a key index tracking major Chinese companies listed in Hong Kong fell for the eighth straight day, dragged lower by a second day of panic-selling in mainland markets.
    The Hang Seng index rose 0.7 percent, to 21,404.96, while the China Enterprises Index lost 0.9 percent, to 9,514.04 points.
    Hong Kong-based analyst Chi Lo said that emergency cash injections by the People's Bank of China will overall have a positive effect on the market.
    "I think short term this is the key reason why we are seeing the Chinese stocks rebounding because the market has been short of cash if you would in the past few weeks. Partly because cash just leaves the market and people were selling. And the PBOC has not been really coming forth too aggressively in injecting funds. So once when it moves, it is a signal to the market that liquidity is coming back. And the reaction is expectedly positive," said Lo.
    Chinese stocks have lost nearly 20 percent over the past two trading sessions, in a crash that has sent shock waves across global markets, but some investors believe pessimism has been overly excessive in Hong Kong.
    The rebound in the Hang Seng was led by tech stocks , but many other sectors, including property, materials and energy remained in negative territory.
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