China shares made tentative gains after officials announced
fresh steps to rein in short selling, while commodities weakness
spread to some Asian currencies, including the Malaysian
ringgit.
The Shanghai Composite Index opened up 0.5% at 3630.51, and the
smaller Shenzhen Composite Index rose 0.8% to 2069.21. The
small-cap ChiNext board is up 1% to 2422.76.
Chinese regulators are continuing to roll out rescue measures to
stem a 30% decline in equities since mid-June. Late Monday, the
Shanghai and Shenzhen stock exchanges announced revised rules on
short selling to curb high-frequency trading, according to
statements published on their official websites.
Under new rules, short sellers must wait at least one day to
cover their positions and pay back loans used to buy shares.
Previously, investors could cover their positions within the same
day.
Regulators said the earlier practice could "add to abnormal
volatility of stock prices, and affect market stability," according
to the statement.
The move comes as Chinese regulators have deepened scrutiny of
automated trading. A total of 38 trading accounts on the Shanghai
and Shenzhen Stock Exchange have been frozen as of Monday over
trading irregularities, including one account managed by U.S.-based
hedge fund firm Citadel Securities.
Meanwhile, a continued slide in commodities—from oil to gold and
copper—has pressured some Asian currencies.
A slump in oil, which has fallen below $50 a barrel, stands to
threaten Malaysia's oil-export revenues and deals another blow to
the battered ringgit, already one of Asia's worst-performing
currencies this year. The currency also has struggled amid a
continuing investigation into the troubled state investment fund
1Malaysia Development Bhd., stoking worries over the nation's
political stability.
The U.S. dollar traded as high as 3.8650 ringgit from 3.8498
late Monday in Asia. The currency fell as much as 0.9% against the
U.S. dollar Monday, its biggest move in eight weeks, and is down
10.6% this year. Expectations of a U.S. rate increase later this
year, which could incite investors to shift to less-risky assets,
adds another layer of uncertainty.
Malaysia's exports, due Wednesday, likely contracted for the
third consecutive month as a sluggish global economy and weak
commodity prices weighed on demand. Exports are expected to fall
0.4% in June from the same month a year earlier, according to
median forecast from a survey of nine economists by The Wall Street
Journal.
Brent oil futures were down 0.8% to $49.89 a barrel in Asia
trade, after data Monday showed a gauge of Chinese factory-floor
activity slumped to a two-year low. A decline in the U.S. the
Institute for Supply Management's manufacturing purchasing managers
index added to pressure.
Gold prices were down 0.7% at 1083.18 an ounce in Asia trade,
with the yellow metal hitting five-year lows in recent days amid a
higher U.S. dollar and expectations of a U.S. rate increase.
Stock markets in the Asian region were roughly flat. The Nikkei
Stock Average fell 0.2%, South Korea's Kospi was up 0.1% and the
S&P ASX 200 was up 0.4%.
In Australia, the central bank is widely expected to keep its
cash rate steady at a record low 2.0% in its policy meeting
Tuesday, although the economic outlook remains clouded for policy
makers. Some recent data has pointed to strength in hiring and
business conditions, and consumer confidence has been rising.
However, a protracted commodities slump has pressured Australia's
resources-dependent economy. While the Australian dollar has fallen
to six-year lows, a potential boon to exporters, a downturn in
mining investment continues to hurt the broader economy and
non-mining business investment remains weak.
Write to Chao Deng at Chao.Deng@wsj.com
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