By THE ASSOCIATED PRESS
August 25, 2015
TOKYO — Shares were mostly lower in Asia on Wednesday, after a move by China to cut its key interest rate failed to spark a sustained rally on Wall Street. Investors looked set for another white-knuckle day as Chinese, Hong Kong and Japan shares bobbled in and out of negative territory.
Japan’s main Nikkei 225 stock index gained 0.3 percent to 17,860.90, while Hong Kong’s Hang Seng index was up and down, losing 0.3 percent to 21,337.62. China’s benchmark Shanghai Composite Index — source of much angst through these days of volatility — fell 1.8 percent to 2,910.97. Australian shares fell 0.1 percent to 5,131.30 and shares in New Zealand, Taiwan and Southeast Asia were mostly lower.
“Asia remains the epicenter of the current market instability,” Evan Lucas of IG said in a market commentary, noting that fears of a reoccurrence of past crises may be overblown due to today’s stronger financial systems and currency reserves across the region.
“Market ‘stability’ will then come from this region – however the slide in China and Japan suggest sentiment is ruling price action and hyper-fear trading is still in control,” he said.
Key to the problem is the perception among many investors, analysts say, of a loss of control by the Chinese regulators and leaders.
A rally in U.S. stocks evaporated just minutes before the closing bell Tuesday, sending the Dow Jones industrial average down 204.91 points, or 1.3 percent, at 15,666.44 and extending Wall Street’s losing streak to six days — the longest such stretch in more than three years.
Shares had surged after China, the world’s second-largest economy, cut its interest rates for the fifth time in nine months in a renewed effort to shore up growth. The central bank also increased the amount of money available for lending by reducing the reserves banks are required to hold.
Global markets surged on the news out of Beijing, and for a while, it looked as if U.S. stocks would follow suit and the global sell-off might stop.
Stocks also got a lift from economic reports showing a rebound in U.S. consumer confidence and sales of new American homes.
At one point Tuesday, the Dow was up as much as 441 points. But sell orders began pouring in in the last 15 minutes of trading, and stocks swung abruptly from positive to negative territory.
The Standard & Poor’s 500 index fell 25.60 points, or 1.4 percent, …Read More