TOKYO: Asian markets were roiled Monday, as China’s stocks closed in bear-market territory, and uncertainty about Greece shook sentiment across the region.
A move by China’s central bank over the weekend to cut interest rates failed to give a sustained lift to China’s main stock market, which has fallen 21.5% from a high on June 12, crossing the 20% threshold that defines a bear market. Stocks have been under pressure over the past two weeks after a yearlong debt-fueled rally.
The Shanghai Composite Index closed down 3.3% after rising more than 2% at the open, while the smaller Shenzhen market ended down 6.1%. The ChiNext board, which consists of small-cap companies and is sometimes known as China’s Nasdaq, ended the day down 7.9%.
In Hong Kong, the Hang Seng Index was on track for its worst day for more than a year, falling 2.7%, while listings of Chinese companies, known as H-shares, fell 3.6%.
“I prefer staying on the sidelines for now because the market still looks very volatile,” said Frank Zhuang, a 43-year-old retail investor in Nanjing. “It’s still too early to say any rally would be sustainable because our economy is really weak,” he added.
Other Asian markets fell after Greece shut its banking system. Australia’s S&P/ASX 200 index and Japan’s Nikkei 225 Stock Average both are down 2.1% on the news from Greece.
The euro fell 2.2% against the yen in morning trade in Asia, as investors piled into the Japanese currency, which is considered a safe-haven in times of financial stress.
Gold prices are up 0.7%, after paring earlier gains, at $1,181.90 per troy ounce, while Brent crude futures slid 1.2% to $62.49 a barrel.
