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Asian Stocks Mostly Lower After North Korea Nuclear Test

  • VOA News

A man walks past an electronic stock indicator of a securities firm in Tokyo, Wednesday, Jan. 6, 2016.

A man walks past an electronic stock indicator of a securities firm in Tokyo, Wednesday, Jan. 6, 2016.

Many Asian stock markets declined Wednesday after a North Korean nuclear test unnerved investors, while the stock market in China itself steadied after news that Beijing would keep market-steadying measures in place.

Japan's benchmark Nikkei 225 index fell 1.3 percent to 18,144.99, and South Korea's Kospi slid 0.5 percent to 1,920.16. Australia's S&P/ASX 200 lost 1.3 percent to 5,117.90.

Hong Kong's Hang Seng fell 0.8 percent to 21,005.51, but the CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 1.8 percent, to 3,539.81, while the Shanghai Composite Index gained 2.3 percent, to 3,361.84 points. It had slumped 6.9 percent on Monday and 0.3 percent on Tuesday.

Rules that prevent shareholders who own more than five percent of a company from selling off shares were set to expire this week.

But a report in the Shanghai Securities News said the China Securities Regulatory Commission (CSRC) would keep the ban in place until new rules come into effect. The CSRC did not specify when the new policy would be ready.

Many traders attributed Monday's sell-off to concerns that the expiration of the share-sale ban, imposed at the height of the market volatility last year, could cause an estimated $190.23 billion of shares to be dumped onto the market, Reuters reported.

Some traders say further restricting share sales was not justified, and would only prolong, rather than stop, market volatility.

"It's like the sword of the Damocles overshadowing the market," Shen Weizheng, fund manager at Shanghai-based Ivy Capital, told Reuters.

Meanwhile, a monthly survey of China's service industries slipped to a 17-month low, renewing concern among investors that the world's second largest economy may be losing steam.

"I didn't expect 2016 to be anything other than a roller-coaster, but we're really starting off the roller-coaster really early," Michael Every, head of Asia-Pacific financial market research at Rabobank, told The Associated Press.

European stock markets also fell at the start of trading Wednesday, on news that Pyongyang said it had carried out a "successful" miniaturized hydrogen bomb test.

Some material for this report came from Reuters and AP.