On most Asian stock exchanges, share prices fell this morning for the third consecutive day, as investors were unsettled by a new attempt by Chinese authorities to rein in lending to prevent excessive economic growth, which could spur inflation.
On the Tokyo Stock Exchange, the Nikkei index fell 0.3 percent this morning, while share prices in Hong Kong plummeted more than 1 percent, and in Shanghai more than 2 percent. Share prices also fell in Singapore and Taiwan, while stock indices in Australia, South Korea, and India slightly increased. Around 7 a.m., the MSCI index of Asia-Pacific stocks, excluding Japan, was down 0.2 percent. At the start of today’s trading on Asian exchanges, share prices rose, fueled by yesterday’s gains on Wall Street, but the news that the Chinese central bank ordered at least two of the largest local banks to stop issuing loans and increase reserves by the end of January prompted caution among investors.
Analysts interpret this as a new attempt by Chinese authorities to curb excessive growth of the world’s third-largest economy and thus keep inflation under control. Fears of a slowdown in the Chinese economy, and consequently a decline in local demand, have caused a drop in commodity and oil prices. The price of ‘black gold’ plummeted this morning by more than 60 cents, to $78.60 per barrel. The decline in commodity prices is also a result of the strengthening dollar, particularly against the euro, which is under pressure due to investor concerns regarding the Greek debt crisis. Therefore, the price of the euro fell from yesterday’s 1.4390 to 1.4166 dollars, the lowest level in the last five months. The dollar also strengthened against the Japanese currency, with its exchange rate jumping from yesterday’s 90.49 to 91.17 yen. (H)
