Asian stocks fell for a fifth day as Greece asked for a deferral on its debt payments. Chinese shares rallied, with the benchmark Shanghai Composite Index closing above 5,000 for the first time since 2008.
Nippon Sheet Glass Co., which gets almost 40 percent of sales from Europe, slipped 1.4 percent in Tokyo. Citic Securities Co. fell 2.8 percent in Hong Kong after China’s biggest brokerage said it will step up monitoring of margin financing on stocks to reduce trading risks. China Railway Group Ltd. and China Railway Construction Corp. each jumped 10 percent in Shanghai as the industry provided the biggest boost to the benchmark mainland gauge.
The MSCI Asia Pacific Index lost 0.5 percent to 148.55 as of 4:11 p.m. in Hong Kong, sliding a fifth day and poised to close at a two-month low. The measure is set for second week of losses amid a selloff in bonds and commodities. Greece became the first country since the 1980s to defer a payment to the International Monetary Fund. While international officials have reported some progress in the talks in recent days, German Chancellor Angela Merkel said they were far from reaching a conclusion.
“The market selloff isn’t over given the huge moves we’ve seen this week in the bond markets,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, said by phone. “Greece delaying debt payments is definitely not positive. There’s a lot of pressure on asset prices that’s really related to the bond market moves.”
U.S. 10-year treasury yields increased 22 basis points this week, set for the biggest such gain since the period ended March 6, amid a global selloff in fixed income. German government bonds are headed for the worst week in the euro’s history, with yields up 40 basis points this week, the most since October 1998. The rout has spooked even 44-year veteran Bill Gross.
Japan’s Topix index slipped 0.4 percent. Taiwan’s Taiex index and Australia’s S&P/ASX 200 Index each lost 0.1 percent. New Zealand’s NZX 50 Index closed little changed. South Korea’s Kospi index dropped 0.2 percent. Singapore’s Straits Times Index declined 0.3 percent. Hong Kong’s Hang Seng Index slumped 1.1 percent.
The Shanghai Composite Index climbed 1.5 percent, capping a 8.9 percent advance this week, the most since December. Price swings are widening, with the Shanghai index’s 100-day volatility measure at the highest level in more than five years.
“Volatility will probably increase,” said Wang Zheng, the Shanghai-based chief investment officer at Jingxi Investment Management Co. “The higher the index moves, we’ll see more investors take short-term profits.”
Record growth in margin debt helped add more than $4 trillion to the value of mainland Chinese shares this year as the Shanghai Composite surged 55 percent. While bulls say gains are fueled by confidence President Xi Jinping will succeed in turning the nation from an export-led manufacturer into a consumer-spending powerhouse, bears point to valuations as evidence of a bubble. Shares on the gauge traded at 20.1 times estimated earnings at the close today, compared with 17.7 times for the Standard & Poor’s 500 Index on Thursday.
E-mini futures on the Standard & Poor’s 500 Index were little changed today. The underlying equity measure dropped 0.9 percent to a four-week low on Thursday. The IMF cut its U.S. growth forecast and said the Federal Reserve should hold off from raising interest rates until the first half of 2016. The government’s monthly employment data are due today, and economists predict the economy added 226,000 jobs in May, compared with April’s 223,000.