SINGAPORE - Asian bourses took knocks once again on Tuesday, as panic returned to the Chinese markets on the back of a weakening yuan.
Traders pulled back on fears that Beijing will allow further depreciation in the currency, even though the central bank, which devalued the yuan by about 2 per cent in a shock move last Tuesday, has said it sees no reason for a further slide.
This led the Shanghai Stock Exchange Composite Index to plunge 6.15 per cent - its biggest single-day drop since July 27.
Adding to the fluster was the announcement made by China's securities regulator last Friday - that China Securities Finance Corporation, the state agency tasked with supporting share prices, will reduce buying as the market stabilises.
"Investors ran for the exit when the government failed to step in to support the market," Mr Steve Wang, the chief China economist at Reorient Financial Markets in Hong Kong, told Reuters.
"The CSF has become a main player in this market so everyone is watching it. People panic when it stops buying."
The fears in China spilled over into other bourses in the region, which failed to find support from the positive sentiment in Wall Street, where the Dow Jones Industrial Average edged up 0.39 per cent overnight.
The Hang Seng Index in Hong Kong fell 1.43 per cent to its lowest in six weeks, while the Nikkei 225 Index lost 0.32 per cent.
The Straits Times Index dropped 17.7 points, or 0.58 per cent, to 3,049.65.
The day's losses were led by Noble Group, the largest commodity trader in Asia, which slumped four cents or 8.79 per cent to 41.5 cents, amid a downswing in the commodities market.
It was also the most active counter with 99.4 million shares being traded.
The new low - a level not seen since 2008 - comes after its chief executive said the company was open to selling its core businesses during an investor meeting on Monday.
Rigbuilders Keppel Corporation and Sembcorp Marine also took a beating as oil prices continued to stay down. KepCorp sank 12 cents or 1.65 per cent to S$7.15, while SembMarine slid three cents or 1.17 per cent to S$2.53.
