This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Asia: Rate Cuts Fail to Bolster China

After a volatile sell-off this week in Asia, markets ended mixed Friday, with Chinese indices in flat territory after dropping at the end of the day as multiple lending rate cuts in Hong Kong could not sustain investor sentiment.

The Hang Seng closed up 23 points, or 0.8%, to 28,783, while the Shanghai Composite Index lost 15 points, or 0.27%, to 5315.

In Japan, the Nikkei suffered the region's worst declines, closing down 188 points, or 1.2%, to 15,583, rapidly nearing a 52-week low of 15,262. The Topix fared similarly, down 22 points, or 1.5%, to 1494. The Kospi rose 10 points, or 0.55%, to 1990.

"After a whole week's decline for this week I still see the index becoming very volatile since market sentiment is turning back and most of the investors are cautious about sub prime," says Castor Pang, a market strategist for Sun Hung Kai in Hong Kong. "Hong Kong banks allowed an interest rate cut but that couldn't help the whole day -- only 23 points up was smaller than expectations," adds Pang.

In morning trading, HSBC, Hang Seng Bank, and Bank of China each announced they would cut their prime lending rates by 25 basis points, to 7%. Bank of East Asia and Standard Chartered Bank announced after hours that they would cut their prime lending rates by 25 basis points too, to 7.25%. All reductions will take effect on Monday.

Hong Kong's momentum stocks lost their luster in late trading as uncertainty for the coming week began to creep in during afternoon trading.

China Mobile (CHL) fell 0.65%, to HK$137, while PetroChina (PTR - Get Report) managed to sustain a 0.87% gain, to end at HK$16.14.

China Life Insurance (LFC) dipped 1.88%, to HK$44.40, while in other financials, HSBC Holdings (HBC) fell 0.98%, to HK$141 on news of the lending rate cut.

In China, People's Bank of China's deputy governor Wu Xiaoling was publicly dismissive of the recent rise in the yuan, which ended today at 7.4113 vs. dollar, and which some say is headed towards 7. A strengthening yuan is generally seen as a negative for Chinese exporters.

"I hope foreign private equity funds would make more use of the yuan market," Wu told local journalists. "What the country needs is not money, but expertise in investment and management of private equity funds."

In Japan, financials there were even harder hit, with Mizuho Financial (MFG) plunging 5.7%, to 531,000 yen, while Mitsubishi UFJ (MTU - Get Report) dived 4.8%, to 920 yen.

Exporters were also sold, with Sony (SNE) down 0.74%, to 5,350 yen, Canon (CAJ) off 1.41%, to 5,580 yen, NTT DoCoMo (DCM) sinking 4%, to 168,000 yen and Nintendo (NTDOY) sliding 3.76%, to 61,400 yen.

The yen continued to strengthen in Asian trading, to 112.5 vs. the dollar, from 112.59 yesterday.

Investors in Hong Kong are notably less confident about the slide in Asian shares right now, compared with a month ago when many were unsurprised by a similar round of selling.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
HBC $0.00 0.00%
ACH $11.57 -1.70%
CHL $66.15 1.40%
MFG $3.64 0.28%
LFC $60.05 -0.83%

Markets

DOW 18,138.99 +42.09 0.23%
S&P 500 2,103.86 +5.33 0.25%
NASDAQ 4,992.3490 +25.2080 0.51%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs