Chinese stocks dropped as traders unwound bullish bets and plunging oil prices weighed on energy producers.
The Shanghai Composite Index fell 1 percent to 2,721.30 at 9:38 a.m., extending its decline this year to 23 percent. PetroChina Co. slid to a one week-low. Developers eked out gains after the central bank lowered mortgage down payments for first-home buyers. The Hang Seng China Enterprises Index tumbled 3.4 percent, heading for its lowest close since March 2009.
Margin debt in China’s stock market shrunk to the lowest level since December 2014 on Monday, a sign of waning investor confidence after the Shanghai Composite Index’s biggest monthly tumble since 2008. The central bank said it will allow banks to cut the minimum required mortgage down payment to 20 percent from 25 percent for first-home purchases to the lowest level ever as it steps up support for the property market. Mainland markets will be closed all next week for lunar new year holidays.
Furures on the Standard & Poor’s 500 Index slumped 0.4 percent after the gauge lost 1.9 percent overnight.
The outstanding balance of margin debt on the Shanghai and Shenzhen stock exchanges dropped for 22 straight days to 897.6 billion yuan ($ 136.4 billion) on Monday, according to data compiled by Bloomberg. It fell below the lows reached during a summer rout when the Shanghai gauge tumbled more than 40 percent from mid-June through its August low.
Japanese stocks rose for a second day after the Bank of Japan’s unexpected boost to stimulus, paring the Topix index’s worst start to a year since 2009. Major lenders fell again following the central bank’s decision to start charging for some of their deposits held at the institution.
The Topix added 2.1 percent to 1,462.67 at the close in Tokyo, after rising on Friday amid wild swings as investors assessed the BOJ’s plan to introduce a negative interest rate on some deposits. The Nikkei 225 Stock Average gained 2 percent to 17,865.23. The yen traded at 121.32 per dollar after slumping 1.9 percent on Friday.
Consumer lenders led gains, with Acom Co. surging 15 percent, the most since June 2014, after posting an increase in profit. Sony Corp. jumped 12 percent after reporting third-quarter earningsthat beat analyst estimates. NTT Docomo Inc. jumped 14 percent, its biggest gain in almost 16 years, after Japan’s biggest mobile phone carrier said it will buy back as much as 500 billion yen ($ 4.1 billion) of its own shares.
Nisshin Steel Co. soared 15 percent, the most in a year and biggest increase on the Nikkei 225, after saying it will buy back shares and confirming it’s in buyout talks with Nippon Steel & Sumitomo Metal Corp., which added 10 percent. Shiseido Co. advanced 13 percent after reporting operating profit that beat its forecasts. Murata Manufacturing Co. surged 16 percent, its biggest increase since 1998, after third-quarter profit beat estimates.
The Topix Banks Index sank 6.6 percent to lead declines among the 33 industry groups on the broader gauge. Mitsubishi UFJ Financial Group Inc., the nation’s largest lender, lost 5.5 percent before it reports earnings after the market closes.