Asian markets closed mostly in green on Friday, while Taiwan Stock Exchange was closed on account of ‘Make-Up’ holiday. China’s Shanghai Composite plunged extending the weekly drop to 13% - the biggest sell-off in seven years, as tight market liquidity caused by new share issues triggered a large sell-off. The market loss was the worst since May 28. China’s market regulator last week tightened some rules for margin trading, through which investors borrow funds to trade stocks, and prohibited dealers from raising funds outside of the margin trading channel to trade stocks. Besides, a total of 11 companies issued new shares for investor subscription, which usually drains funds away from the existing market. The regulator approved 24 initial public offerings earlier this month. Bank of Indonesia kept its benchmark interest rate steady at 7.50% at a policy meeting, as a falling rupiah and accelerating inflation continue to weigh on the economy.
The Bank of Japan held policy steady as expected in an 8 to 1 vote that saw Takahide Kiuchi again propose cutting the pace of government bond buying by nearly half. The BoJ is now buying government bonds at a pace of 80 trillion yen, with Kiuchi suggesting that be dropped to 45 trillion yen. The board did conclude that the economy continues to recover moderately and that private consumption has been resilient, while exports have improved. Japan’s index of leading economic indicators rose less-than-expected last month. The index of leading economic indicators rose to a seasonally adjusted 106.4, from 107.2 in the preceding month. Japan’s All Industries Activity Index rose to a seasonally adjusted 0.1%, from -1.4% in the preceding month whose figure was revised down from -1.3%.
Asian Indices | Last Trade | Change in Points | Change in % |
Shanghai Composite | 4,478.36 | -306.99 | -6.42 |
Hang Seng | 26,760.53 | 65.87 | 0.25 |
Jakarta Composite | 4,985.01 | 39.51 | 0.80 |
KLSE Composite | 1,721.77 | 3.65 | 0.21 |
Nikkei 225 | 20,174.24 | 183.42 | 0.92 |
Straits Times | 3,300.96 | 0.54 | 0.02 |
KOSPI Composite | 2,046.96 | 5.08 | 0.25 |
Taiwan Weighted | - | - | - |
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