Chinese shares fell as lower profits triggered concerns that the slowdown in growth may have a greater impact on earnings than expected, and overshadowed speculation that Beijing will increase economic stimulus.
The FTSE Asia Pacific index edged up 0.2 per cent to 223.51, receiving a fillip from comments from the Chinese premier Wen Jiabao who hinted at stimulus. The Shanghai Composite index slumped 1.7 per cent to 2,147.96, however, its lowest level in more than three years. Japanese markets were closed for a public holiday.
ZTE, the fifth-biggest telecoms equipment maker, fell 16.3 per cent to HK$10.46 in the wake of a statement last week saying profits could fall 80 per cent and a report that US authorities are investigating the alleged sale of banned US computer equipment to Iran.
Suning, China’s biggest home appliance retailer slumped 10 per cent to Rmb7.28 after it said first-half profit may fall by between 20 and 30 per cent, compared with the 10 per cent forecast previously.
Mr Wen said efforts to stabilise the economy were working and that Beijing would step up efforts this year to increase policy effectiveness and foresight.
The second half would see Beijing “increase efforts to preset and fine-tune its policies, and make policies more targeted, foresighted and effective”.
Beijing reported on Friday that growth in the second quarter slowed for the sixth quarter in a row, to 7.6 per cent on a year-on-year basis.
Elsewhere in the region, stocks gained on speculation about more stimulus in China. Hong Kong’s Hang Seng index advanced 0.2 per cent to 19,121.34, South Korea’s Kospi index rose 0.3 per cent 1,817.79 and Australia’s S&P ASX 200 climbed 0.6 per cent to 4,105.10.
Get alerts on Asia-Pacific equities when a new story is published