Chinese Banking Shares Tumble, Japanese Car Makers Take a Hit

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Shares in Asia slid lower Monday. In China, the Shanghai Composite Index fell 1.1% to close at 3,094. Japan's Nikkei 225 Index lost 0.7%, ending the day at 10,513, and Hong Kong's Hang Seng Index dropped 0.6% to 20,599.Still reeling from President Obama's proposal to curb risk-taking at banks and investment firms, Chinese banking shares slipped lower today. Additionally, an announcement that Bank of China (BACHY) may resort to issuing bonds in order to raise capital sent that bank's shares down 0.5% and chilled the sector further. Bank of Communications (BCMXY) plunged 3.2%, China Merchants Bank (CIHHF) fell 2.6%, China Construction Bank (CICHF) lost 1.8%, Industrial & Commercial Bank of China (IDCBY) was down 1% and China's first privately owned bank, China Minsheng Banking Corp., tumbled 1.9%.

Chinese car makers also closed lower on the expectation that as liquidity dries up, so too will consumer appetite. FAW Car sank 1.7%, SAIC Motor fell 1.5% and DongFeng Automobile, which has partnered with Honda and produces everything from tour buses to SUVs, slid 3.1%.

One bright spot was a 6% surge in share price of China Sports Industry Group, builder of sports facilities. According to China Daily, investors are betting that there is a huge market in China for sports facilities. China is becoming known for stadium development. A Chinese firm, completed the rebuilding of a 40,000-seat stadium in Zambia in record time, on schedule for the 2010 FIFA World Cup South Africa, and the national stadium in Mozambique will also be Chinese-built.

In Hong Kong, today's losses brought the Hang Seng down 10% from its November high, according to Bloomberg. Banks in the territory fell, with HSBC losing 1.6% and Standard Chartered falling 1.8%. Hong Kong-listed oil and mining shares dropped as the price of crude oil remained low after last week's declines. Cnooc slumped 1% and PetroChina dropped 0.8%. Angang Steel fell 2.3% and Maanshan Iron and Steel (MAANF) dropped 1.6%. Real Gold Mining slid 1.1%.

In Japan, drug maker Kyowa Hakko Kirin plunged 4.3%, but car makers led declines. Toyota lost 2.1%, on worries that the recall of cars with faulty accelerators may be expanded. Honda was down 1.7% and Nissan fell 1.2%.

Among the carnage, Japanese audio and video equipment maker Pioneer, surged 6.8% and car audio and karaoke equipment manufacturer Clarion spiked up 12.4%. As markets sink lower, perhaps more investors are consoling themselves with music, a drink and singing in Karaoke clubs across the region.
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