Chinese mkts slump on stricter bank regulation norms

Published on Tue, Nov 24, 2009 at 16:07 | Updated at Tue, Nov 24, 2009 at 16:40 | Source : CNBC-TV18

Video

Blish This

Asian markets ended lower. China's Shanghai Composite plunged 3.45% or 115.137 points at 3,223.526. Taiwan's Taiwan Weighted added 0.36% or 27.41 points at 7,714.56. Hong Kong's Hang Seng dropped 1.53% or 348.25 point at 22,423.14. Singapore's Straits Times slid 0.64% or 17.90 points at 2,779.98. Japan's Nikkei was down 1.01% or 96.10 points at 9,401.58. South Korea's Seoul Composite fell 0.78% or 12.63 points at 1,606.42.
But the market that has fallen the most is the Chinese market. Chinese banking regulators have asked banks to strictly comply with capital requirement norms failing which sanctions could be withdrawn to banks not complying, which has triggered the losses in the Chinese markets, reports CNBC-TV18's Varinder Bansal.
Here is a verbatim transcript of Varinder Bansal’s comments on CNBC-TV18. Also watch the accompanying video.
There are a few statements which are coming from China especially from the banking regulators which mention that they have issued a stern warning on all banks of China to strictly comply with the capital requirements or there will be no sanctions which will be given to the banks. This has led to some nervousness in the Chinese market.
Also important was the B-shares. The B-shares in China are the foreign currency denominated index whether it is in the US Dollars or Hong Kong Dollars. This is one index trading down nearly 8%. Month to date if we don’t see today’s fall they have rallied nearly 20% and that is why a huge fall of 8% was something to talk about.
Also some of the commodities which are listed on Shanghai have been weak: aluminium, copper is trading down nearly 0.5-1%.
China has been outperforming month to date and even if you see this month, the Chinese Index is up nearly 13% compared to S&P which is up nearly 6-6.5%, the Sensex which is up nearly 8%. So there was some nervousness which was going around. But some statements coming from the regulators indeed have given a shock to the market and that is why we are seeing a huge fall of 3.5% in the Chinese index.

Some More on CNBC-TV18 Analyst - Markets

Asian mkts mixed as no concrete ste...

Nifty has strong support at 4650: A...

US mkts recover sharply from day's ...

Dow slips below 10k for 1st time si...