Asian shares fell last week, dragging the benchmark MSCI Asia Pacific Index to its biggest weekly drop since March, as concerns mounted the region’s central banks will tighten monetary policy to curb inflation.
Bank of China Ltd, the nation’s third-biggest lender, sank 3.6 percent in Hong Kong, as Chinese banks started to restrict new loans. BHP Billiton Ltd, the world’s biggest mining company, dropped 5.5 percent in Sydney as metal prices fell.
Toyota Motor Corp, the world’s biggest auto maker, tumbled 14 percent after it expanded a recall of vehicles with a gas-pedal flaw.
The MSCI Asia Pacific Index dropped 4.5 percent to 116.83, the biggest decline since the week ended on Feb. 20.
The gauge has fallen 7.8 percent in the past two weeks as US President Barack Obama proposed measures to limit risk taking at banks and China took steps to rein in lending growth.
“There is less appetite for risk and a lot more cautiousness in the market,” said Stephen Halmarick, Sydney-based head of investment-markets research at Colonial First State Global Asset Management, which holds about US$135 billion.
“China’s tightening moves and the recent US banking regulation has unsettled people’s expectations about liquidity,” he said.
The weekly decline followed a 52 percent rise for the MSCI Asia Pacific Index in the 12 months to Jan. 22 as growth in China helped the global economy emerge from the worst recession since World War II.
The Nikkei 225 Stock Average declined 3.7 percent last week amid concern a weakening dollar would hurt the value of US sales at Japanese companies. US jobless claims for the week ended on Jan. 23 declined less than some economists expected.
Australia’s S&P/ASX 200 Index fell 3.8 percent as the government reported a bigger-than-estimated increase in fourth-quarter consumer prices, fueling speculation of more interest-rate increases.
The Reserve Bank of Australia raised borrowing costs three times last year and traders are betting policy makers will again raise rates on Tuesday.
Chinese banks fell amid concern government steps to rein in lending will hurt economic growth. GDP expanded 10.7 percent while consumer prices rose a higher-than-estimated 1.9 percent last month from a year earlier, according to government data on Jan. 21.
Industrial & Commercial Bank of China Ltd, the nation’s biggest lender by market value, lost 2.6 percent to HK$5.70. China Construction Bank Corp, the second-biggest lender, slipped 3.6 percent to HK$5.98.
The nation’s central bank on Jan. 12 raised the reserve requirement for banks and guided higher yields for treasury bills at auctions earlier this month.
Chinese banks have begun restricting new loans after the China Banking Regulatory Commission said lenders that failed to meet some regulatory requirements have been told to limit lending.
The Shanghai Composite Index slumped 4.5 percent, the biggest weekly fall since the period ended on Nov. 27.
Bank of China dropped 3.6 percent to HK$3.75 in Hong Kong. The Beijing-based lender, which is planning a 40 billion yuan (US$5.9 billion) convertible bond sale in China, told analysts on Monday it could raise additional capital by selling new shares in Hong Kong.
Speculation also mounted that India will tighten monetary policy to prevent its economy from overheating. India’s Sensitive Index added 0.3 percent in the week as the Reserve Bank of India said on Thursday that inflation has become a “major concern.”
The central bank on Friday raised the reserve requirement for banks to 5.75 percent from 5 percent.
TAIPEI
The TAIEX index dropped 3.6 percent last week, extending the previous week’s 5.1 percent slide.
Other regional markets:
KUALA LUMPUR: Malaysian shares fell 5.35 points, or 0.42 percent to 1,259.16.
JAKARTA: Indonesian shares lost 8.78 points or 0.34 percent to 2,610.79.
MANILA: Philippine shares fell 0.28 percent, or 8.44 points, to 2,953.19.
WELLINGTON: New Zealand shares lost 0.60 percent, or 18.95 points, to 3,164.65.
MUMBAI: Indian shares added 0.31 percent, or 51.09 points, to 16,357.96.
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