Property Developers Fall In China

Asian stock markets ended lower Tuesday, with Chinese property developers falling on concerns Beijing may launch more measures to cool property prices, while Japanese shares were pulled lower by selling in stocks that went ex-dividend.

The day began on a weak note as investors followed Wall Street's lead and took some cash off the table after recent gains.

"After recent gains, we are seeing some softness but certainly nothing of any conviction. Stocks that have run quite well over recent weeks are having a bit of a breather today," said Helen Spencer, client adviser at Macquarie Private Wealth.

The Nikkei Stock Average fell 1.1%, Australia's S&P/ASX 200 slipped 0.1% and South Korea's Kospi shed 0.3%.

China's Shanghai Composite lost 0.6%, Hong Kong's Hang Seng Index declined 1.0%, while Taiwan's Taiex ended flat and India's Sensex was 0.1% lower. Dow Jones Industrial Average futures were down 39 points in screen trade.

Persistent talk that Beijing may introduce more restrictive policies to make housing more affordable on the mainland hurt Chinese property developers and banks. China Vanke slid 2.8% in Shenzhen, while China Merchants Bank Co. shed 1.8% and Beijing Vantone Real Estate fell 3.3% in Shanghai.

"Investors are trading cautiously in the face of several large uncertainties on policies for real estate developers and banks," said Zhang Zhuo at Minsheng Securities.

Shares of Ningbo Port fell 3.5% on its debut in Shanghai to end at CNY3.57, compared with its CNY3.70 initial public offering price. The port operator raised CNY7.4 billion from its IPO after selling two billion A-shares.

Amy Lin at Capital Securities said large-caps such as port companies were out of favor with investors concerned over slower economic growth domestically and globally.

Aluminum Corp. of China, or Chalco, jumped 4.3% and by the day's 10% limit in Shanghai on parent Chinalco's plan to invest CNY10 billion to develop rare earth resources and acquire a majority stake in Jiangxi Rare Earth and Rare Metals Tungsten Group.

The Japanese market was weighed by a large number of stocks trading ex-dividend. High-yielding pharmaceutical stocks underperformed the market, with Eisai down 3.8% and Takeda Pharmaceutical 3.2% lower. Among other stocks that went ex-dividend, Nomura Holdings shed 3.3%, NTT DoCoMo lost 2.5% and Inpex slid 2.2%.

Even so, "speculation on more Bank of Japan monetary-easing measures is supporting the market and fueling hopes that the yen will not strengthen further," said Cosmo Securities equity strategist Toshikazu Horiuchi, after the Nikkei reported the Bank of Japan will discuss taking additional easing steps at its October policy board meeting.

Trading was cautious as investors also awaited the results of the Bank of Japan's quarterly tankan survey, due Wednesday. The business sentiment survey details Japanese corporations' foreign-exchange-rate assumptions and their outlooks for employment and capital expenditure.

Takefuji tumbled by its daily limit of 32.2%, after going untraded for most of the session, as sellers far exceeded buyers. The consumer lender filed for bankruptcy protection later on Tuesday.

In Hong Kong, the Hang Seng Index appears "overdue" for a pullback, local brokerage Taifook said. The brokerage added that a correction in local property stocks "looks more imminent" after their significant outperformance of late against the broader market, and ahead of the territory's chief executive's policy address in early October, which may include possible measures to cool the housing market. Sun Hung Kai Properties fell 1.2% and Sino Land lost 1.6%.

China Unicom fell 4.3% on equity-dilution concerns a day after the mobile-service provider announced a convertible bond issue to raise $1.82 billion

In Seoul, Hyundai Motor fell 3.1%. "The recent recall news of its Sonata sedans in the U.S. and its plan to acquire Hyundai Engineering & Construction may be pushing down shares of Hyundai Motor," said Bae Sung-young at Hyundai Securities.

Shares of Nufarm dropped 3.9% in Sydney on news the company has swung to a net loss in the year ended July 31 from profits in the previous year.

Elsewhere in the region, New Zealand's NZX 50 slipped 0.3% and Philippine shares ended flat. Singapore's Straits Times Index dropped 0.5%, Indonesian shares rose 0.1% and Thailand's SET Index fell 0.3%.

In foreign exchange markets, the euro was at $1.3413 from $1.3444 in late New York trade Monday and at Y112.99 from Y113.25. The dollar was at Y84.21 from Y84.25.

Lead Japanese government bond futures were up 0.22 at 143.05 points, following U.S. Treasurys' lead Monday. The yield on the benchmark cash JGB was down 3.5 basis points at 0.960%.

Spot gold was at $1,287.30 per troy ounce, down $7.30 from the New York close. Nymex November crude-oil futures were down 80 cents at $75.72 per barrel on Globex