Asian shares were mostly lower Monday, tracking losses on Wall Street, though a newly launched technology stocks market in Shanghai soared with its trading debut.
Prices of the 25 companies listed on the Shanghai Stock Exchange’s STAR Market more than doubled, with one company, Anji Microelectronics Technology (Shanghai) Co., Ltd. 688019, +400.15% , logging a 415% advance.
Japan’s Nikkei 225 NIK, -0.23% closed down 0.2%, the Shanghai Composite index fell 1.3% SHCOMP, -1.27% Australia’s S&P/ASX 200 XJO, -0.14% ended down 0.1%, South Korea’s Kospi 180721, -0.05% closed unchanged, and Hong Kong’s Hang Seng HSI, -1.37% dropped 1.3%. Taiwan’s Taiex Y9999, +0.66% bucked the trend with a gain of 0.6%, along with Singapore STI, -0.61% rose 0.6%.
Regulators have approved 25 companies in information technology and other fields for the STAR Market. The market, modeled on the U.S.-based NASDAQ, reflects the ruling Communist Party’s desire to channel private capital into its development plans. It gives small Chinese investors a chance to buy into tech industries that until now have turned to Wall Street to sell shares.
Shares surged in early trading, thanks to massive oversubscription in IPO shares by retail investors. Trading in the new market is expected to be volatile in the early going. “Initially, there could be trading imbalances between supply and demand, and the market should look at fluctuations in a reasonable way,” Liu Ti, deputy general manager of the Shanghai Stock Exchange, said recently, according to Reuters.
Regulators have approved 25 companies in information technology and other fields for the STAR Market. The market, modeled on the U.S.-based NASDAQ, reflects the ruling Communist Party’s desire to channel private capital into its development plans. It gives small Chinese investors a chance to buy into tech industries that until now have turned to Wall Street to sell shares.
Elsewhere in Asia the mood was more subdued.
Among individual stocks, SoftBank 9984, +2.91% rose in Tokyo trading, while Nintendo 7974, -2.38% and convenience-store chain FamilyMart 8028, -3.11% declined. In Hong Kong, Sunny Optical 2382, -0.79% gained, while property companies such as China Overseas Land & Investment 688, -2.62% and Wharf Real Estate 1997, -3.17% slid. SK Hynix 000660, +2.08% surged in South Korea while Samsung 005930, +0.85% edged up ahead of its quarterly earnings report. In Australia, Beach Energy BPT, +5.28% and Fortescue Metals FMG, +2.30% rose.
“If I had to quantify the equity market risk, it’s 90% Fed policy, and 10% geopolitical worries as investors remain wholly captivated by the looser the policy, the better the risk opportunities,” Stephen Innes, managing partner at Vanguard Markets, said in a note Monday.
U.S. stocks pulled further back from their records on Friday to cap the weakest week for the S&P 500 since May as sentiments turned lower after Iran said it seized a British oil tanker, the latest escalation of tensions between Tehran and the West.
Momentum for U.S. stocks has slowed since early June, when they began soaring on expectations that the Federal Reserve will cut interest rates for the first time in a decade to ensure the U.S. economy doesn’t succumb to weaknesses abroad. The Fed’s next meeting is scheduled for the end of this month.
“With the markets wholly captivated by the looser the policy, the better the risk opportunities, investors could remain singularly focused on the Federal Reserve, and the European Central Bank policy decision and communications as global equity markets continue to have their ups and down based on the perceived degree of accommodative central bank policy,” said Stephen Innes of Vanguard Markets said in a commentary.
Benchmark U.S. crude oil CLQ19, +1.02% added 44 cents to $56.07 a barrel. Brent crude BRNU19, +1.58% , the international standard, rose 53 cents to $63 per barrel.
The dollar USDJPY, +0.18% rose to 107.93 Japanese yen from 107.60 yen Friday.