By Chao Deng
Asia shares were mostly lower Thursday with China suffering the
most, in response to fresh worries over Beijing's restrictions on
lending by local brokerages.
Hong Kong's Hang Seng Index fell 1.1% and Japan's Nikkei Stock
Average was down 1.1%, as investors factored in a statement by the
U.S. Federal Reserve Wednesday that it would remain patient in
raising interest rates. Asian investors are weighing the prospect
of monetary easing and interest-rate cuts by central banks around
the world with tightening by the U.S. Fed. More easing is expected
to keep capital flowing into risky assets, including stocks in
Asia.
Hong Kong-listed China stocks performed especially badly, amid
concerns about another clampdown on margin financing. The Hang Seng
China Enterprises Index lost 2.2% and on the mainland, the Shanghai
Composite was down 1% after China's securities regulator said it
would inspect margin trading activities at dozens of companies,
according to the state-controlled news agency Xinhua.
Margin trading--the practice of borrowing money to invest in
stocks--helped the Shanghai benchmark gain 53% last year. The
outstanding balance of margin is at just over 1.1 trillion yuan
($177 billion).
Chinese shares sank 7.7% at the beginning of last week when the
regulator said it had suspended three of the country's largest
brokers from opening new margin-trading accounts for clients for
three months. This time around, the regulator told Xinhua that the
inspections were a normal event that "should not be
over-interpreted."
Overnight weakness in oil also weighed on the market. In Asian
trade, U.S. oil prices stayed below the $45-a-barrel mark.
The FTSE Bursa Malaysia was down 0.7% while the ringgit traded
near a 5 1/2-year low after the country's central bank kept
interest rates on hold Wednesday. Malaysia is a net exporter of oil
and its stocks have been the hardest-hit amid the global oil-price
slump.
In Australia, the S&P ASX 200 was up 0.3%. The country's
central bank remains on track to cut interest rates in the coming
months, if not next week, amid a slowing local economy and rising
unemployment. The Reserve Bank of Australia meets on Tuesday.
In Korea, Samsung Electronics Co. was down 1.3% after the firm
said the worst was likely over for its mobile division, as its
turns to mobile chips and cheaper smartphones to spur a recovery in
profit. Samsung said its fourth-quarter profit fell to 5.35
trillion won ($4.9 billion), down 27% from a year earlier and
marking a third straight quarter of decline as its mobile
division's operating profit plunged 64%.
Write to Chao Deng at Chao.Deng@wsj.com