Asia stocks suffer after ECB; Sharp, Sony plunge
HONG KONG (MarketWatch) -- Most Asian markets tumbled Friday, joining a global chorus disappointed with the European Central Bank's inaction, while weak earnings from
The Shanghai Composite Index (000001) ended 1% higher, as a reduction in stock trading fees and the central bank's comment that it will make stabilizing economic growth a bigger priority fueled hopes more stimulus was on the way.
The broad losses followed weak cues from U.S. and European markets after the ECB refrained from announcing any bold measures to ease the regions' debt crisis, belying expectations that had been built in after ECB President Mario Draghi recently pledged to do "whatever it takes" to preserve the euro.
"The bar had been well and truly raised by what [Draghi] said, and the ECB under-delivered in a big way," said BNP Paribas economist Ken Wattret said.
"We're still expecting more policy action -- they have to do something, the economy is weak -- but Germany is still not co-operating," said Linus Yip, strategist at First Shanghai Securities in Hong Kong.
Despite the day's losses, most of the regional markets ended the week on a positive note.
The Hang Seng Index clinched a 2% gain, followed by a 1.3% advance for the Taiex, a 1.1% rise for the Kospi, a 0.3% increase for the S&P/ASX 200 and a 0.2% lift for the Shanghai Composite. The Nikkei ended the week 0.1% lower, as Friday's losses erased gains recorded earlier in the week.
Weak earnings dealt some severe blows to stocks in Tokyo.
Bucking the general market trend,
A sharp drop in many commodities overnight pressured resource stocks.
Mainland Chinese stocks ended higher, however, after the country's financial regulator said it will cut stock-trading fees with effect from Sept. 1, according to a state-media report. Read more on China's reported cut to stock fees.
Hopes of more policy stimulus in China were also aided after the People's Bank of China said it would make it will make stabilizing economic growth a bigger priority, in its quarterly monetary policy report released Thursday. Read more on PBOC policy report.
"We've seen policy coming out gradually, like cutting the trading levy or transaction costs in Asian markets, and we could see another cut [to banks'] reserve requirement ratios this weekend," First Shanghai Securities' Yip said. "China stimulus could be the trigger-point for a rebound in Asia."