Disappointing trade figures have seen stocks in mainland China take a dive as investors have indicated they don't believe in a speedy economic recovery. Beijing looked reluctant to introduce a new stimulus program.
China stocks tumbled again on Monday morning, reaching eight-month lows as investors saw hopes for a strong economic recovery fade.
Following the market's nearly 3-percent slump last Friday, China's blue-chip CSI-300 fell by 1.7 percent by lunch time, while the Shanghai Composite index lost 2.2 percent in midday trading.
The drop came afterthe world's second-largest economy
had published fresh trade data, showing that both exports and imports had fallen more than expected by analysts.
Speculators in the crosshairs?
As demand from both home and abroad was weak, the prospect of a fresh stimulus program could have boosted investor sentiment. But an article in Monday's edition of the "People's Daily" indicated that the government would not resort to excessive growth programs or rapid credit expansion to boost the slowing economy.
Another reason for the renewed stocks slump were fears of a fresh crackdown by Beijing on speculation after regulators said Friday the valuation gap between the domestic and overseas markets and the activities of shell companies (firms used for backdoor listings) merited attention.
Over in Japan, there was only limited reaction to comments by Japanese Finance Minister Taro Aso on Monday that Tokyo was ready to intervene in the currency market, if the yen's moves were volatile enough to hurt the country's economy and trade.
"In the end, the market will probably try to push the dollar lower as the prospects for US interest rate hikes move further out, almost like a mirage," Sumitomo Mitsui Banking Corporation analyst Satoshi Okagawe said in a statement.
hg/cjc (Reuters, AFP)