By Chao Deng
China stocks fell modestly while markets elsewhere in Asia rose
after the Federal Reserve stuck to a near-zero benchmark interest
rate, as expected.
The Shanghai Composite opened 0.4% lower at 3773.79. The smaller
Shenzhen Composite fell 0.5% to 2188.00 while the small-cap ChiNext
board is down 0.8%.
On Wednesday, the Shanghai Composite snapped a three day losing
streak after authorities came out earlier in the week to say they
would continue to support the market and investigate recent sharp
declines.
Hong Kong's Hang Seng Index is up 0.7% while a gauge of Chinese
companies listed in the city gained 0.6%.
The Federal Reserve offered few clues on plans to raise interest
rates for the first time in nearly a decade. Its easy-money policy,
mirrored by central banks around the world, has helped fuel a rally
since the global financial crisis, and a delay in raising rates
could give stocks more steam.
The Nikkei Stock Average was up 1.1%, S&P ASX 200 was up
0.6% and South Korea's Kospi was off 0.2%.
In China, the second wave of selling this month, bulk of which
came in an 8.5% decline Monday, appears to have helped flush out
more leveraged bets in the market.
Vincent Chan, analyst at Credit Suisse, said that financing for
buying stocks by informal lending channels, as tracked by one major
trading system, likely dropped sharply since mid-July. Authorities
have been clamping down on margin financing--the borrowing of money
by brokerages and unofficial lenders to investors--in an attempt to
stamp out speculative activity. Margin loans spur stocks to rise
and fall quickly.
Still "the direction may be irreversible," Mr. Chan wrote in a
note Thursday. "Informal activities will turn back to offline and
be underground, only to serve big individual clients as they were
before."
Investor's have been unnerved by Shanghai's irregular intraday
trading, which some analysts put down to government intervention in
the market. On Wednesday, the index surged in the last hour of
trading, which likely enticed more local investors to chase the
gains. Chinese authorities don't disclose their pace of buying in
the market, or the total amount that they have bought up in
stocks.
In South Korea, shares of Samsung Electronics Co. were down 1.7%
after the firm said net profit for the second quarter fell 8%.
Sales for the company's flagship Galaxy S6 smartphone fell short of
market expectations and hurt profits.
Oil prices rose Wednesday in the U.S. on unexpected declines in
U.S. crude-oil supplies and production. Prices have slumped this
month on renewed fears about a global glut and China's faltering
demand. Crude oil futures were up two cents at $48.81 a barrel.
Gold prices rose sharply after the Federal Reserve's statement,
but quickly gave up gains. Gold rallied as high as $1,100.90 a troy
ounce in aftermarket trading Wednesday as is currently at $1,097.20
in Asia.
Gold prices had sank to five-year lows in recent weeks amid
expectations for a rate increase, which could incite investors to
move to higher-yielding assets.
Write to Chao Deng at Chao.Deng@wsj.com