MW: Shanghai, Hong Kong slide on profit-taking rush
Autos slump more than 10% in Seoul; Resource stocks skid after oil
HONG KONG (MarketWatch) -- Asian markets weathered heavy losses on Tuesday as cautious investors took some profits off the table in light trading ahead of the holidays, with Chinese stocks falling hard in Shanghai and Hong Kong in spite of an interest-rate cut Monday by the People's Bank of China.
"The interest-rate cut was expected and didn't provide any positive surprise. ... The window-dressing activities are quite close to being over," said Ben Kwong, chief operating officer at KGI Asia in Hong Kong, referring to recent buying activity by funds to shore up the value of their portfolios by the end of the year.
Kwong said smart investors were rushing to lock in profits ahead of others after strong recent advances.
China's Shanghai Composite was off 4.6% to 1,897.22 as investors worried about a slowing economy and a poor outlook for corporate earnings growth.
Hong Kong's Hang Seng China Enterprises Index, a widely-watched benchmark comprised of Chinese large-capital stocks, slumped 5.1% to 7,720.02. The index, which rose during the previous four weeks, is still down more than 53% in 2008 to date.
The benchmark Hang Seng Index lost 2.8% to 14,220.79.
The poor performance of Chinese shares came even after the mainland's central bank cut its key lending and deposit rates by 0.27 percentage points each on Monday as part of efforts to bolster the economy. The central bank said it would also lower the ratio of deposits that banks must set aside by a half-point.
Leading losses in Shanghai, China Life Insurance Co. dropped 4.8%, Air China stock shrank 9.1%, PetroChina Co. gave up 4.3% and Poly Real Estate Group Co. skidded 6.4%.
The Hong Kong listed shares of Air China , meanwhile, shed 6.2% and those of PetroChina Co.slid 5.4%, while China Life's gave up 3.8%.
Tokyo closed; Seoul, Mumbai slide
Japanese markets were closed for the Emperor's birthday holiday.
Among other indexes to suffer big losses, South Korea's Kospi lost 3% to 1,144.31, Taiwan's Taiex ended 2.9% lower at 4,405.86 and India's Sensitive Index, or Sensex, shrank 2.5% to 9,675.76 in afternoon trading.
Australia's S&P/ASX 200 index ended 0.7% lower at 3,498.50, weighed down by resource stocks.
"All funds have finished what [buying] they've got to do. And unless anything extraordinary happens, the buyers just meet the sellers at the buyers' price. So there isn't much volume," said Stuart Smith, a private client adviser at Bell Potter Securities in Brisbane.
In Wellington, the NZX 50 index gave up 0.7% to 2,661.74, after data released by Statistics New Zealand showed the country's economy shrank 0.4% during the quarter ended Sept. 30, extending a recession and raising chances the central bank might keep its monetary easing bias. See full story on New Zealand economy.
By late afternoon, Singapore's Straits Times Index lost 1.5% to 1,719.18 and Malaysia's KLSE Composite slipped 0.3% to 871.16.
Shares of AirAsia slid 0.5% in Kuala Lumpur trading on reports the Malaysian low-cost airline was in talks to merge with the budget carrier of Australia's Qantas Airways. . Qantas stock lost 2% in Sydney.
