Asian shares tumble, STI down 3.21%

Asian stocks closed sharply lower on Thursday with markets gripped by fears that runaway growth in China has gotten out of hand and would dictate further intervention by Beijing.

Investors had shrugged off a record close on Wall Street overnight and sold down the benchmarks from the opening bell, after Chinese authorities announced they would delay the release of first quarter growth figures.

This fed the regional rumour mill and heavy trades were conducted on the prospect that Chinese growth figures would be much higher than anticipated.

In turn, this would lead to further measures, such as interest rate hikes, to cool the rampaging economy and probably trigger a massive sell-off in the booming Chinese stock market.

It was a scenario not unlike Feb 27 when a near nine per cent plunge on the Chinese markets caused panic selling on the global equity markets.

China economic growth
By day's end, authorities released the much awaited figures showing 11.1 per cent growth for the quarter to March, up from 10.4 per cent in the previous three months as the economy charged up again to prompt an official warning the Chinese economy was at risk of overheating.

That was not what investors wanted to hear in Asia, or in Europe where markets were also sold down in early trade.

Investors punished Shanghai to the tune of 4.52 per cent while Tokyo slumped 1.67 per cent, Hong Kong tumbled 2.30 per cent, Seoul was down 1.36 per cent, Taipei fell 1.43 per cent and Sydney shed 1.15 per cent.

Elsewhere, Singapore slumped 3.21 per cent, Jakarta stumbled 2.11 per cent, Kuala Lumpur shed 1.68 per cent as Bangkok fell 0.73 per cent, Mumbai was down 0.38 per cent and Wellington by 0.31 per cent.

SINGAPORE
Share prices closed 3.21 per cent lower on fears that China's rapid first quarter economic growth might prompt a further interest rate hike.

Dealers said worries over a call for measures to cool the possibly overheated Chinese economy were used by investors as an excuse to cash in gains after the main index's recent run-up to record levels.

The Straits Times Index closed down 109.13 points on volume of 3.86 billion shares worth $2.89 billion.

'We are reacting to China's inflation figures and expectations of a further tightening of their fiscal policy,' a dealer with a European brokerage said.

'It's slightly higher-than-expected and the authorities are bothered about it. It doesn't bode well for markets as a whole if China wants to tighten its monetary policy,' he said.

Dealers expect investors to exercise caution over the next few days, with the index taking its cue from the regional markets.

DBS Group Holdings was down 70 cents at $21.60.

KUALA LUMPUR
The benchmark Kuala Lumpur Composite Index, which recorded a new all-time high closing of 1,330.26 on Tuesday, ended the day 22.27 points or 1.68 per cent lower at 1,306.36.

In the broader market, losers outnumbered gainers 919 to 111. Turnover was at 1.8 billion worth RM3.3 billion (S$3.7 billion).

HONG KONG
Blue chips fell 477.38 points or 2.3 per cent and China plays slid 3.2 per cent on Thursday amid a broad sell-off as China's latest economic data sparked fears that the country would take further steps to cool its rapid investment.

The benchmark Hang Seng Index ended at 20,299.71, marking its biggest one-day percentage drop since March 14.

The China Enterprises index of H-shares, or Hong Kong-listed shares in mainland companies, suffered their worst one-day percentage decline since March 5.

TOKYO
Japanese share prices closed down 1.67 per cent on Thursday, hit by worries about a stronger yen and heavy losses on China’s stock markets, dealers said.

They said that the falls came despite fresh gains overnight on Wall Street where the Dow Jones index hit a record closing high on upbeat corporate news.

The Tokyo Stock Exchange’s Nikkei-225 index of leading shares dropped 295.36 points to 17,371.97.

The broader Nikkei-225 index of all first-section shares lost 23.78 points or 1.37 per cent to 1,706.93. -- AFP, REUTERS