Asian Markets Close Lower on Fears of Chinese Tightening Measures


Shares in Asia slid lower Friday as investors reacted to Chinese government moves to tighten credit and clamp down on inflation. In Hong Kong, the Hang Seng Index fell 0.8% to 22,877, and in China, the Shanghai Composite Index sank 0.9% to 2,872. Japan's Nikkei 225 Index edged down 0.4% to end the day at 10,040.

The prospect of U.S. shoppers pouring into stores like Best Buy and Toys R Us to nab Black Friday deals on Asian-made TVs, computers and video games weren't enough to bolster Asian markets Friday. While it may be easy enough to get a bargain today in America, in China prices are still soaring, and the government is pulling out all the stops to curb them.

Shares fell in China and Hong Kong as investors withdrew funds, speculating that sky-high values for big-ticket items like property could soon be a thing of the past. "The macro-economic condition isn't that good with China's monetary tightening concerns, a general manager at Fulbright Securities told Bloomberg. Adding, "Developers are heading for a long decline."

Banks, which have been forced to restrict loans both to developers and buyers, saw their shares slide in Hong Kong. Industrial & Commercial Bank of China tumbled 1.8% and China Construction Bank lost 1.3%. Bank of China slid 1%, Bank of Communications declined 0.7%, and HSBC, the most heavily weighted bank on the exchange, dipped 0.4%.

Among Hong Kong real estate firms, China Resource Land sank 1.1%, Hang Lung and Cheung Kong both gave up 0.9%, and Henderson Land lost 0.6%. Soho China, a company specializing in combining home and office space that has had a huge impact on Beijing's redevelopment, slumped 3.2%. Meanwhile, Swire Pacific, which holds a diverse portfolio of businesses ranging from property to airlines to Coca-Cola bottling, managed a 0.4% gain.

Banks, Property Firms Lead the Decline

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It wasn't a good day for Asian IPOs either. China Modern Dairy Holdings, a milk company, plunged 13.1% on it's first day of trading in Hong Kong. Chinese milk has had a poor reputation in Asia after tainted product scandals such as the 2008 incident in which more than 1,200 children fell ill after ingesting Chinese milk powder laced with the toxic chemical melamine.

In China, banks and property companies led declines on fears that in addition to the current curbs on bank loans, the government might set lending targets much lower for 2012. Shanghai-listed shares of China Construction Bank and Agricultural Bank of China both slid 0.8% and Industrial & Commercial Bank and China Minsheng both slipped 0.7%.

Property companies also closed lower: Poly Real Estate dived 3.1%, Gemdale sank 2.4% and China Vanke lost 2%.

In Japan, it was brokerage firms that dragged the Nikkei lower. Daiwa Securities Group plunged 2.3%, and Nomura plunged 2%. Japanese banks also dipped with Sumitomo Mitsui declining 0.8% and Mitsubishi UFJ sliding 0.5%.

Japanese electronics makers also underperformed Friday, despite the intense post-Thanksgiving shopping going on across the United States. Panasonic and Nintendo both declined 0.6%, Casio Computer lost 0.5%, and Sony dipped 0.2%.