YEREVAN, June 21. /ARKA/. Asian stocks fell Friday after the Federal Reserve’s plans to gradually wind down its bond purchases led to heavy losses on Wall Street, but Chinese shares recovered from their sharp initial declines as Shanghai interbank rates reportedly came off their highs.
The Shanghai Composite CN:SHCOMP -0.07% traded 0.5% lower, and Hong Kong’s Hang Seng Index HK:HSI -0.07% was off 1% by mid-morning trade in the respective markets.
Both benchmarks had dropped more than 2% in early trading, but pared those losses on reports of a sharp fall in the Shanghai interbank money-market rates from the record highs they touched the previous day.
“With spiking rates likely an intentional move by the Chinese government, it’s probably not a sign of an emerging credit crisis, but rather responsible economic management. The main concern with China continues to be slowing economic growth,” said Rivkin Securities global analyst Tim Radford.
Elsewhere in the region, Japan’s Nikkei Stock Average JP:NIK +1.66% fell 0.9%, Australia’s S&P/ASX 200 AU:XJO -0.41% gave up 0.3%, and South Korea’s Kospi KR:SEU -1.49% dropped 1.6%, with each of them also coming off the day’s lows.
The drop in regional stocks came as the S&P 500 SPX -2.50% suffered its worst drop since November 2011 on Thursday, adding to late Wednesday losses after the Fed signaled it may soon downsize bond purchases under its quantitative-easing program.
Commodities also took a major hit, with gold futures sliding more than 6%, while U.S. benchmark crude-oil prices fell nearly 3%. –0–
