Asian Markets

In: Business and Management

Submitted By bonitka
Words 759
Pages 4
← ASIA MARKETS ← MAY 11, 2010, 10:35 A.M. ET
Chinese Stocks Fall on Tightening Fears

By SHRI NAVARATNAM and LESLIE SHAFFER in Singapore and V. PHANI KUMAR in Hong Kong

Hong Kong and mainland Chinese shares slid as the fear of monetary tightening by Beijing resurfaced after economic data revealed consumer and property prices continued to rise on the mainland. Most Asian markets declined.

Several markets opened higher following a hefty increase overnight on Wall Street, but their advance was tempered by concerns over the implementation of the European Union's bailout package. In the Philippines, the market surged after a relatively peaceful election.

"It is becoming blatantly obvious that global economic growth is not going to be smooth sailing," said Southern Cross Equities director Charlie Aitken. "Sovereign-debt issues are the ultimate 'slow fix' problem, with the quicker fix of higher taxation and slower government spending being the archenemy of equity-market investors."

In Shanghai, the Shanghai Composite slid 1.9% to finish at 2647.57, while Hong Kong's Hang Seng Index fell 1.4% to 20146.51.

The decline came after economic data showed Chinese consumer and producer prices increased at a faster-than-expected pace in April, while mainland lenders made local currency loans worth 774 billion yuan ($113.5 billion) in April, up sharply from the 510.7 billion yuan they disbursed in the previous month.

Data released separately also showed Chinese property prices rose 12.8% in April from a year earlier, despite recent tightening measures by authorities. The data served to raise fears of fresh tightening by Beijing, including lending-rate increases.

"China is at risk of overheating, with spot fires breaking out in various parts of the economy, most notably the property market and bank lending," said Brian Jackson, an analyst with…...

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