Heavy selling of stock with exposure to China

Nikkei: 9,460.63 (–146.45) Hang Seng: 22,711.02 (–488.37) Shanghai Comp: 2,775.52 (–82.94)

Nikkei:9,460.63 (–146.45) Hang Seng:22,711.02 (–488.37) Shanghai Comp:2,775.52 (–82.94)

THE NIKKEI average fell to a five-week low yesterday after hedge funds unwound positions in construction machinery makers, spurred by downgrades on sagging China demand.

Hydraulic shovel maker Hitachi Construction slumped 6 per cent to 1,676 yen, and Kawasaki Heavy was down 4.9 per cent to 291 yen. These falls triggered heavy selling in other stocks with high exposure to China such as Komatsu, which slid 5.9 per cent to 2,381 yen.

However, solar-power equipment makers bucked the trend on a report the Japanese government may announce a plan to make solar panels compulsory on all new buildings by 2030.

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Among solar panel stocks, Sharp rose 1 per cent to 733 yen and panel equipment maker Ulvac gained 2.5 per cent to 1,942 yen.

China shares fell to a 3½-month low, dragging Hong Kong lower, as investors piled into a selloff after a spike in money market rates and a softer reading on Chinese manufacturing.

Commercial Bank of China and China Shenhua Energy lost 1.8 and 3.1 per cent, respectively.

PetroChina lost 1.9 per cent as US crude prices fell below $100 per barrel. – (Reuters)