Asian stocks outside Japan slid amid low trading volume as Chinese equities retreated ahead of a flood of new share sales.
China Mobile Ltd. dropped 2.8 percent in Hong Kong on a Xinhua News Agency report that China will cut Internet service fees by 30 percent. China Petroleum & Chemical Corp. slid 1.2 percent as energy shares led declines in Asia after oil capped a three-day loss on Friday. South32 Ltd., the miner spun off from BHP Billiton Ltd., had a disappointing Sydney trade debut amid investor concern for growth potential. Dai-ichi Life Insurance Co. surged 11 percent as Japan stocks advanced on earnings prospects and share buybacks.
The MSCI Asia Pacific ex-Japan Index dropped 0.6 percent to 506.61 as of 5:04 p.m. in Hong Kong. The benchmark MSCI Asia Pacific Index was little changed after rising 1.4 percent last week after selling that erased $400 billion from fixed-income markets subsided.
“Given the uncertainties around the bond selloff, the Fed’s eventual move to tightening and Greece, the next few months could remain volatile for shares,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which manages A$160.5 billion ($129 billion). “In anticipation of a correction in bonds and shares we have been running a higher-than-normal cash allocation and see recent moves as setting up investment opportunities.”
The Hang Seng China Enterprises Index of mainland stocks listed in Hong Kong fell as much as 1.7 percent before closing 0.6 percent lower. Twenty companies are scheduled to sell shares from Tuesday to Thursday, which may freeze 2.8 trillion yuan ($451.1 billion). The Hang Seng Index fell 0.8 percent and the Shanghai Composite Index slipped 0.6 percent, with trading volume on the gauges at least 33 percent below the 30-day average.
Australia’s S&P/ASX 200 Index declined 1.3 percent. South Korea’s Kospi index added 0.3 percent, while New Zealand’s NZX 50 Index gained 0.2 percent.
Japan’s Topix index added 1.2 percent, closing within one point of the highest level since November 2007. Mitsubishi UFJ Financial Group Inc. was the biggest boost to the gauge after the lender posted record profit and announced a 100 billion yen ($834 million) buyback.
E-mini futures on the Standard & Poor’s 500 Index slid 0.1 percent. The underlying gauge extended a record Friday after weak data spurred bets the Federal Reserve won’t rush to raise interest rates. Confidence unexpectedly fell in May by the most in more than two years, while factory production stalled in April.
Fed Chicago President Charles Evans repeated his call to hold interest rates near zero until early 2016 and raise them only gradually thereafter, because inflation is still too far below the central bank’s goal, he said in remarks prepared for a speech Monday in Stockholm.
Greek banks are running short on the collateral they need to stay alive, a crisis that could help force Prime Minister Alexis Tsipras’s hand after weeks of brinkmanship with creditors. In a worst-case scenario, that lifeline will be maxed out within three weeks, pushing banks toward insolvency, some economists say.