Monday, February 3, 2014

Asia Mostly Lower Ahead of Lunar New Year Holiday

Asia equities were mostly down as investors took profit to open a shortened trading week in a number of key Asian markets because of the Lunar New Year. Weighing on markets were Emerging Market currency and current account concerns and whether China is slowing.

China equities fell ahead of the Lunar New Year holiday as investors also took profit while casting a wary eye over how a potential credit default would play out. The SHCOMP close 1% down as Bloomberg News reported that ICBC would offer clients an option to recoup funds they invested in the unusually monikered “Credit Equals Gold #1” note. Payment on the CNY3 billion product is due Friday and a default would have been China’s first. It also put China’s vast shadow banking sector in the spotlight and roiled markets globally.

In Hong Kong, the HSCEI, which tracks China stocks listed in Hong Kong, slid to a five-month low after China Coal Energy said 2013 profit likely fell as much as 65%. The broader Hang Seng Index closed 2.1% lower.

In Southeast Asia, Singapore’s STI dived 1.1%. Debutant OUE Commercial REIT was flat after a mid-day plunge of around 3.8%. Indonesia’s JCI was among the worst performers after it fell 2.6% on concerns its economy may not be able to withstand another asset-purchase trim by the US Federal Reserve when it meets this week.

India’s Sensex plunged 2%, hit by the Emerging Markets fear factor. Tata Motors fell to its lowest in a year after Managing Director Karl Slym died in Bangkok.