Asian bourses take a hit on China crackdown, STI closes 26 points down

SINGAPORE - Asian markets took a hit Friday, dragged down by a steep decline in Chinese shares on fresh regulatory crackdowns and poor mainland industrial profit data.

Local stocks were not left out of the widespread selloff, with the benchmark Straits Times Index (STI) sliding 25.57 points, or 0.89 per cent, to 2,859.12.

The benchmark lost 58.79 points or 2 per cent for the week.

Shanghai slumped 5.5 per cent after the authorities launched a probe into several major brokerage firms over the possible breaking of market rules, while Shenzhen nosedived 6.1 per cent.

Traders also took flight after Beijing said industrial profits fell more than expected in October, in another sign of a slowdown in the world's second largest economy.

"The sharp decline will raise questions whether the authorities' confidence that we are seeing stability in the Chinese markets may be a tad premature," Mr Bernard Aw, IG market strategist in Singapore, told Bloomberg.

"The rally since the August collapse was not fundamentally supported. The removal of restrictions for large brokers to sell and the IPO resumptions may not have been announced at an opportune time."

This comes as traders nervously await the United States Federal Open Markets Committee meeting next month, which is expected to result in an interest rate hike.

Elsewhere in the region, Hong Kong dropped 1.9 per cent, logging a 3 per cent loss for the week - its biggest weekly decline since late September.

Tokyo lost 0.3 per cent, Seoul pared 0.08 per cent, Sydney slipped 0.2 per cent and Jakarta fell 0.8 per cent. Wall Street was closed on Thursday for Thanksgiving Day.

The STI's weak performance yesterday was led in part by casino operator Genting Singapore, which fell two cents or 2.6 per cent to 75 cents on a hefty trading volume of 51.2 million units.

The local banks fared poorly as well, with OCBC Bank shedding four cents or 0.5 per cent to $8.68; DBS Group Holdings losing six cents or 0.4 per cent to $16.60; and United Overseas Bank down two cents or 0.1 per cent to $19.23.

Commodity trader Noble Group was the only winner among the STI components, reversing its six-day losing streak to rise half a cent or 1.3 per cent to 40 cents.

Medical supplies group QT Vascular was the day's most active counter, with 151.6 million shares changing hands. The stock surged two cents or 21.5 per cent to 11.3 cents.

The firm said on Thursday that a US court has suspended the July judgment of a lower court which had awarded US$20.4 million to AngioScore in a patent lawsuit against its chief executive, QT and its related units.

Malaysian tax advisory firm Axcelasia, which debuted on the Catalist board yesterday, closed at 25 cents, unchanged from its offering price.

Its listing brings the total number of companies on the Catalist board to 171, with a combined market capitalisation of $10 billion.

Some 1.05 billion shares worth $1.03 billion were traded across the bourse.