Asian sharemarkets bounce back as Shanghai continues to fall
Australia leads recovery with strong demand for bank shares.
Chinese shares fell in early trading today, following initial heavy losses in the Japanese, Korean and New Zealand markets.
But other markets rallied with strong openings in Australia, Hong Kong and Taiwan.
The Shanghai Composite Index opened 6.4% lower and the smaller Shenzhen Composite Index fell 7%.
A benchmark of volatile small-cap stocks, the ChiNext Price Index, fell below 2000 for the first time since March, down 7.2%.
The Shanghai Composite has since clawed back some of its losses but is still down 4.5%.
Japan’s Nikkei Stock Average initially fell 3.8% but is up 1.1% in afternoon trading. Korea’s Kospi was down 0.7% at the start but has since gained 1.5%.
New Zealand bounced after dropping as much as 2.6% and is close to recovering all its losses.
Banks have pushed Australia's S&P ASX 200 2.5% higher, with Westpac Banking up 4.5% and Macquarie up 4.8%.
Hong Kong’s Hang Seng Index is up 2.2% and Taiwan’s Taiex is up 2.7%, while Singapore’s FTSE Strait Times is up 2.5%.
On Monday, Chinese shares suffered their biggest single-day loss in more than eight years.
So far, Chinese authorities have shown no signs of stepping in with fresh support measures, as has happened on previous occasions.
Observers have expected some form of commentary to soothe the panic or support measures such as a cut in banks’ reserve ratio requirements, which many traders had expected since last week.
The state-owned People’s Daily has described the 8.5% drop in the market as “Black Monday.”
It was Shanghai’s largest percentage decline since February 2007 and pushed the benchmark into the red year to date.
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Nevil Gibson
Tue, 25 Aug 2015
Tue, 25 Aug 2015
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Asian sharemarkets bounce back as Shanghai continues to fall
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