China stocks plummet

Worries that Beijing will try to rein in economy send Shanghai index lower 4.4%; Tokyo's Nikkei edges higher.

Most Asian markets fell Thursday, with shares in Hong Kong and Shanghai sliding sharply on concerns that Beijing will take steps to cool China's economy.

The region's biggest bourse in Tokyo ended mixed amid persistent worries over the outlook for the U.S. economy, a vital export market for Asia, after Wall Street dropped again overnight.

There still is a lot of uncertainties in the U.S. economic outlook, as well as on China's macro policies, that could dampen buying interest in the near term, said Peter Lai, a director at DBS Vickers in Hong Kong.

In Hong Kong, the Hang Seng index sank 613.27 points, or 2.3 percent, to 26,004.92 after earlier rising as much as 1.4 percent. Leading decliners were port operator China Merchants Holdings and rival Cosco Pacific.

Some investors held back because of the U.S. Thanksgiving holiday Thursday.

They were were also discouraged by economic data in the U.S. released Wednesday that showed a drop in consumer sentiment, with the Conference Board's Index of Leading Economic Indicators falling 0.5 percent in October. The Dow Jones industrial average fell 1.62 percent Wednesday to 12,799.94.

Asian markets have been battered in recent weeks.

Since reaching record highs in October, benchmark indices in both Hong Kong and Shanghai - two of the world's best-performing markets this year - have fallen 17 percent. In Japan, the Topix index of all the issues of the Tokyo Stock Exchange's First Section, has declined nearly 21 percent from its 2007 high in February.

Some analysts see a buying opportunity.

There are not enough factors to justify a further drop in Japan shares, said Yasushi Hoshi, strategist at Daiwa Securities in Tokyo.

On the Chinese mainland, the Shanghai Composite Index plunged 4.4 percent to 4,984.16 on expectations of further economy-cooling measures. Premier Wen Jiabao suggested earlier this week that China needs to do more to prevent a bubble in stock and property prices.

Concerns over PetroChina's valuation following its Nov. 5 trading debut, when it tripled from its initial public offering price, also dampened buying sentiment. PetroChina lost 4.6 percent Thursday.

Still, traders said the Shanghai index was unlikely to fall much further given the ample liquidity available for share dealings.

What the market lacks isn't cash but confidence, said Simon Wang, an analyst at Xiangcai Securities.

In Tokyo, the benchmark Nikkei stock index rose 0.34 percent to 14,888.77 in a pre-holiday session as the dollar rebounded against the yen from a 2 1/2-year low hit overnight.

But concern over the exposure of insurance companies to the problems in the U.S. mortgage market dragged down the broader Topix index, which dipped 0.09 percent to 1,437.38 points.

Finance Minister Fukushiro Nukaga and Bank of Japan board member Seiji Nakamura both expressed concern about how problems in the U.S. economy might affect Japan. Traders said the market is especially sensitive to the health of consumer spending ahead of Christmas in the U.S.

Japanese trading houses Mitsui & Co. and Sumitomo Corp. were among the gainers.

Katokichi Co. jumped 17 percent to 694 yen after Japan Tobacco Inc. and instant noodle maker Nissin Food Products Co. said Thursday they will jointly buy the frozen food producer in a deal exceeding ¥100 billion (nearly $1 billion) to create Japan's biggest frozen food maker.

In currency dealings, the U.S. dollar was trading at ¥109.00 midafternoon, up from ¥108.68 late Wednesday in New York. It dropped as low as ¥108.25 in the New York session. The euro rose to $1.4860 from $1.4848.

Financial markets in Japan will be closed Friday for the Labor Thanksgiving Day holiday. The markets will reopen on Nov. 26.

Elsewhere, Thailand's benchmark stock index rose 0.2 percent to 808.8, shaking off sour sentiment that dragged it to a 10-week low of 796.9.

Indonesia's main index rose 0.2 percent to 2,569.5 in thin volume.

Malaysian shares fell on concerns over the health of the U.S. economy and high oil prices. The Kuala Lumpur Composite Index fell 1.2 percent to 1,344.2.

Philippine shares continued to fall, weighed down by the heavy losses on Wall Street. The Philippine Stock Exchange Index dropped 0.9 percent to end at 3,478.9, its third day of decline.

South Korean shares fell for a sixth straight session, dropping below the psychologically important level of 1,800 despite gains in the telecommunications sector and exporters such as Samsung Electronics and Hyundai Motor. The Korea Composite Stock Price Index, or Kospi, shed 0.4 percent to finish at 1,799.0.

Australian investors remained nervous over global fallout from the problems with risky housing loans in the U.S. The benchmark S&P/ASX 200 index dropped 0.8 percent to close at 6,334.3, after hitting its lowest level in two months at 6,312.6.

Taiwan shares rose on bargain-hunting. The Weighted Price Index of the Taiwan Stock Exchange rose 0.2 percent to 8,499.4, rebounding from Wednesday's three-month low.

New Zealand stocks fell after sharp drops in the U.S. and U.K. overnight. The NZX-50 index lost 0.4 percent to close at 4,054.2 point.

Source - CNN Money