BEIJING: Shares in China veered between gains and losses Monday, pressuring the region’s markets and adding to worries about a U.S. interest rate rise.
Most Asian stock benchmarks declined while currencies like the Malaysian ringgit and Indonesian rupiah fell to fresh lows against the U.S. dollar, after a U.S. jobs report Friday refocused investors’ attention on the possibility that the Federal Reserve may soon raise short-term interest rates.
On Monday, the Shanghai market wavered, despite soothing comments from the governor of China’s central bank over the weekend and more efforts by authorities to contain market turbulence. The Shanghai Composite Index SHCOMP, -2.52% was up nearly 2% earlier, before falling back to close with a loss of 2.5% at 3,080.42.
The “correction in the stock market is almost done” and China’s financial markets are expected to become “more stable” after the Chinese yuan steadies following a devaluation last month, said Zhou Xiaochuan in remarks to central bankers and finance ministers from the Group of 20 largest economies on Saturday.
Investors were also assessing comments from China Securities Regulatory Commission that the government will intervene to prevent drastic selloffs, and is even studying a “circuit breaker” system to halt trade during times of extreme volatility. This came after the authorities further tightened rules over stock-index futures trading and penalized three online trading platforms for the illegal provision of margin loans recently.
Still, “in a market where investor sentiment remains fragile, the official statement will have limited impact as the market functions on its own logic,” said Zheng Chunming, analyst at Capital Securities.
