Mainland markets were the biggest losers in the region on Thursday, as fears over tighter requirements on margin financing ignited risk-off sentiment. The rest of the region, meanwhile, shrugged off an inspiring lead from the U.S. overnight to trade mixed.
Overnight, Wall Street ended sharply higher, with the tech-heavy Nasdaq (^IXIC) logging a record high close, amid a slight pause in recent climbs in the dollar and bond yields. The Dow Jones Industrial Average (Dow Jones Global Indexes: .DJI) and S&P 500 (^GSPC) settled up 0.67 and 0.92 percent, respectively.
European stocks also rallied following news that debt-stricken Greece has started crafting an agreement with its international bailout supervisors.
Mainland markets plunge
China's key Shanghai Composite widened losses in the afternoon session to end down 6.5 percent at a near one-week low, marking its biggest one-day loss since January 19 and breaking an eight-session winning streak. The CSI 300 index of the largest listed companies in Shanghai and Shenzhen tumbled 6.7 percent, while the start-up board ChiNext sank 5.4 percent.
News that more Chinese brokerages are tightening margin lending rules seem to be the main cause of concern among retail investors, experts say. According to IG market strategist Bernard Aw, Guosen Securities increased the margin requirement for 908 counters while Southwest Securities reduced the amount of margin financing that traders can receive using collateral.
Separately, the Shanghai Securities News also reported that regulators have recently urged banks to submit data regarding money flows into the stock market, according to Reuters.
Financial and property heavyweights saw steep declines; China Construction Bank (Shanghai Stock Exchange: 1939-SZ) and Bank of China (Shanghai Stock Exchange: 1988-SZ) sank more than 5 percent each, while Shanghai Shimao and Gemdale lost 9.5 and 8.9 percent, respectively.
Meanwhile, Hong Kong's Hang Seng index tracked their mainland peers to close down 2.2 percent, hitting a two-week low.
Shares of Hong Kong-listed Sunac China Holdings (Hong Kong Stock Exchange: 1918-HK) plunged 7.06 percent following news that it is terminating a takeover deal for troubled Chinese developer Kaisa (Hong Kong Stock Exchange: 1638-HK). Meanwhile, Evergrande Real Estate Group (Hong Kong Stock Exchange: 3333-HK) announced plans to raise around $600 million in a Hong Kong share offering.
Nikkei rises 0.4%
Japan's benchmark Nikkei 225 index closed up at a fresh 15-year high of 20,551, extending gains to a tenth straight session, as the dollar-yen flirted with an eight-year peak in Asian trade. The Japanese currency touched 124.28 and retreated back to 123.67 by late Thursday.
According to Reuters, the index has chalked up its longest winning streak since February 1988.
As a result, exporter stocks especially carmakers, got a fillip. Honda Motor (Tokyo Stock Exchange: 7267.T-JP), Toyota Motor (Tokyo Stock Exchange: 7203.T-JP) and Nissan (Tokyo Stock Exchange: 7201.T-JP) climbed nearly 2 percent each, while Suzuki Motor (Tokyo Stock Exchange: 7269.T-JP) moved up 0.8 percent. Sony (Tokyo Stock Exchange: 6758.T-JP) trimmed early gains to close up 0.2 percent after the head of Sony's loss-making mobile telecom unit said late Wednesday that cost cuts may be necessary to absorb the dollar's sharp rise versus the yen.
The financial sector also helped to propel the bourse; Mizuho Financial rallied 5.9 percent, while Resona Holdings and Sumitomo Mitsui Financial Group surged 3.5 and 2.8 percent, respectively.
On the domestic data front, retail sales rose 5.0 percent in the year to April, data released before the market open showed on Thursday, missing expectations for a 5.4 percent rise, but still marking the monthly indicator's first increase in four months.
ASX slips 0.2%
Australia's S&P ASX 200 index ended in negative territory after first-quarter capital expenditure data came in below expectations. Meanwhile, the Australian dollar (Exchange:USDAUD=) fell to $0.7682 against the U.S. dollar, from a five-week low of $0.775 prior to the data.
Most miners outperformed the resources sector on the back of iron ore prices at a three-month high. Fortescue Metals (ASX:FMG-AU) and Rio Tinto (ASX:RIO-AU) closed up 3 and 0.6 percent, respectively, but market bellwether BHP Billiton (ASX:BHP-AU) shed 0.5 percent.
Newcrest Mining (ASX:NCM-AU) plunged 5.4 percent as spot gold hovered near a two-week low , while energy counters such as Santos (ASX:STO-AU) and Origin Energy (ASX:ORG-AU) fell nearly 1 percent each.
Banking stocks also traded mixed, with the Commonwealth Bank of Australia (ASX:CBA-AU) and National Australia Bank dropping 0.8 and 0.4 percent, respectively, while Australia and New Zealand (ASX:ANZ-AU) edged up 0.6 percent.
PSEi tanks 1.2%
Philippine stocks extended losses to hit their lowest level since January 23, after less-than-stellar gross domestic product (GDP). The peso (Exchange:PHP=) recovered from initial losses to trade at 44.600 against the U.S. dollar, from 44.550 peso near midday.
The Southeast Asian economy expanded 5.2 percent on-year in the January-March period, missing Reuters expectations for a 6.6 percent growth. GDP figures for the fourth quarter of 2014 were revised to 6.6 percent from 6.9 percent, the country's statistics agency said on Wednesday.
"As of the morning session, we've seen some panic selling [and the index] is poised to test the next support at 7,400. Previously investors view Philippines as the darling of Asia but following the data, investors find it hard to justify valuations at these levels," Lexter Azurin, head of equity research and senior manager at Unicapital Securities, told CNBC.
Kospi adds 0.16%
South Korea's Kospi index rebounded from a one-week closing low. The Seoul bourse was the region's biggest loser in the previous session with a slump of 1.7 percent, marking its largest single-day fall in nearly five months.
Gainers included pharmaceuticals and banks; Hanmi Pharm Co (Korea Stock Exchange: 12894-KR). and Hyundai Pharmaceutical elevated 0.9 and 0.4 percent, respectively, while Shinhan Financial (Korea Stock Exchange: 5555-KR)and Hana Financial closed up 1.9 and 1.2 percent, respectively.
Outperforming the bourse, Samsung SDS and Hyundai Golvis Co. jumped 9.3 and 6.3 percent, respectively, on expectations they would benefit from restructuring of their respective groups.
Samsung's de facto holding company Cheil Industries and construction affiliate Samsung C&T snapped a two-day winning streak supported by Tuesday's merger announcement. Shares of both companies reversed a higher open to tank 2.4 and 3.2 percent, respectively.
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