By Daniel Inman
Asian markets were mostly down on Tuesday, with Shanghai leading
the region lower, while Australia was weighed by further falls in
mining stocks.
The Shanghai Composite lost 0.9% to 2,066.70 after data showed
that China attracted less foreign direct investment in May -- down
6.7% from a year earlier at $8.6 billion. Furthermore, there were
concerns that the government's attempts to stimulate the economy
will have a little effect. This was especially evident in bank
stocks, which fell just one day after rising on news that some
midsize lenders had received approval from the central bank to cut
the amount of cash that they have to set aside as reserves.
"The policy makers are focused on targeted easing, so the effect
from the bank's targeted reserve requirement cuts on the stock
market are easily worn off," said Deng Wenyuan, analyst at Soochow
Securities.
China Minsheng Banking declined 0.8% and Industrial Bank was
1.5% lower.
Australia's S&P/ASX 200 lost 0.2% to 5,400.70, as mining
companies were hit by further falls in the price of iron ore, which
fell 2% to a fresh 21-month low. Rio Tinto (RIO) lost 1% and
Fortescue Metals Group (FSUMY) was 3% lower
Energy stocks in Sydney were also weighed by news that Royal
Dutch Shell is selling 3.2 billion Australian dollars ($2.99
billion) worth of shares in Woodside Petroleum to institutional
investors, which were selling other stocks to buy into the deal --
especially in the energy sector, with Oil Search down 0.5% and
Santos down 1.5%.
Elsewhere in Asia, South Korea's Kospi rose by 0.4% to 2,001.55,
Hong Kong's Hang Seng Index fell 0.4% to 23,203.59, and Singapore's
Straits Times was down 0.5% late in Asia.
The Nikkei bucked the region's downward trend starting the day
0.6% higher, as the market recovered from a 1.1% drop on Monday --
the index's largest daily fall in a month. The index gave up some
of those gains as the session progressed, and ended up 0.3% to
14,975.97.
Tokyo stocks were supported by a weaker yen, which stabilized
after the dollar softened overnight. The dollar (USDJPY) was last
trading at Yen102.01, compared with Yen101.83 late Monday in New
York.
Trading was generally quiet, following a flat session in the
U.S. overnight, as markets waited for the conclusion of the Federal
Reserve's policy meeting on Wednesday, which will give an update on
the direction of monetary policy in the world's largest
economy.
More MarketWatch news:
Japan's Abe unveils corporate-tax cut, other reforms
Asia Stocks live blog: Policy plays in Japan and China
IMF urges U.S. to raise minimum wage
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