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Asia Markets
Australian Shares Fall
From the Wall Street Journal of Mon, 08 Dec 2014 23:01:35 EST

Stocks in Australia led Asia-Pacific declines on Tuesday amid a renewed slide in oil prices, while Shanghai shares rebounded in a choppy morning session, suggesting continued worries about an overheated market.

Australia’s S&P ASX 200 was down 1.4% at 5298.00, led lower by energy and mining shares. Oil producer Santos Ltd. tumbled 8.1%, following a downgrade by Standard & Poor’s. Woodside Petroleum Ltd. was down 3.4% and Oil Search Ltd. slipped 1.9%. BHP Billiton Ltd. was 3.5% lower and Rio Tinto Ltd. lost 2.6%.

Both U.S. oil prices and brent crude, the global benchmark, fell more than 4% overnight to fresh five-year lows, extending a six-month selloff. Lower oil prices hurt oil-exporting nations like Australia. Oil futures on the Nymex were last at $62.64 a barrel, while ICE brent crude traded at $65.75 a barrel in Asian trade Tuesday.

Investors in Australia were also selling after a monthly survey by National Australia Bank showed Australian consumer and business confidence levels falling sharply in November. The data reflected growing uncertainty about the economic outlook and the survey raises the likelihood of an interest-rate cut early next year.

A bout of volatility in Shanghai stocks that started last Friday was subsiding. Investors continued to weigh the merits of chasing gains in the market, which is up 45% year-to-date, versus taking profits before a possible correction. The Shanghai Composite Index was last up 1.1% to 3053.86, although it fell as much as 1.5% earlier.

Some of the weakness appeared to stem from a new rule by China’s securities clearing house late Monday that tightened the use of corporate bonds as collateral for short-term financing. The rule is an attempt to rein in risky debt issuances from struggling companies and local governments.

Yields were up sharply in China’s bond market on the news, with the benchmark seven-year government bond yield rising to 4.00% from 3.78% Monday.

Still, analysts said buying has been supported by hopes for an imminent cut in the reserve requirement ratio for banks by Chinese policy makers aiming to help economic growth. “It’s not easy to witness a decent retreat for now as everyone, even those never trade stocks, are looking to profit from stock trading,” said Wang Xiaojun, an analyst at Cinda Securities.

Elsewhere, the Nikkei Stock Average was down 0.4% at 17867.13 and Korea’s Kospi lost 0.3% to 1972.53.

Japan’s market continues to face headwinds from the weak economy. Revised data Monday showed the economy contracted more than the government estimated in the third quarter, which confirmed that the country was in a recession.

Write to Chao Deng at

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