Chinese language shares received the week off to a downbeat begin after the disappointing knowledge launched over the weekend, with the CSI300 index and Shanghai Composite Index down three.5 % and three.2 %, respectively.
Monday’s decline was caused by another set of dissapointing economic figures, which showed industrial output rose 6.1% in August, failing to achieve analysts’ expectations of 6.5%.
The first rise in US interest rates in almost a decade would ripple through markets around the world.
The Chinese stock exchange fell for the second straight day this week as bearish sentiment prevailed in the market on Tuesday.
Beijing reacted forcefully. The People’s Bank of China cut interest rates for the fifth time in nine months, regulators suspended new share listings, and threatened to throw short sellers in jail.
Underscoring investor concerns toward China’s volatile stock market, index provider FTSE Russell last week decided against adding shares listed in mainland China to its global indexes.
The Hang Seng Index in Hong Kong was up 217.38 points at 21,672.61 by the break.
“[The] conditions are right for a move and we believe the Fed will raise rates by 25 basis points”, Zal Devitre, head of investments at Citibank Singapore, told CNBC.
In the latest evidence of the impact of the economic slowdown, Volkswagen and other major carmakers in China have started to rein in production, wages and costs, industry sources said.
Asian stocks, with the exception of Australia’s ASX 200 and large-cap firms in China, endured a tough start to the trading week on Monday. Stock markets in Malaysia and the Philippines were up slightly.
China’s stock markets have been on a roller-coaster ride in the past few months, falling close to 40 percent since June and prompting frantic efforts by authorities to restore confidence. However, Hong Kong was up 0.62 percent and Sydney rose 0.31 percent.
Japanese shares ralled as the yen weakened amid speculation Bank of Japan policy makers will signal the possibility of more stimulus after a meeting on Tuesday. That alleviated worries that brokerages are aggressively clearing out illegal margin trading accounts, many of which are believed to belong to trust firms.
China on Sunday unveiled broad reform guidelines for state-owned companies aimed at making them more globally competitive and increasing transparency. The plan represents a modest adjustment to China’s brand of state capitalism.
August industrial output and investment data on Sunday pointed to further weakness in the economy, and concerns about growing capital inflows added to the disquiet.