[HONG KONG] Asian stocks extended declines as a global rout deepened, pushing a measure of equities around the region toward a two-year low.
The MSCI Asia Pacific Index retreated 2.8 per cent to 127.83 as of 10:46 am in Tokyo, heading for the lowest close since June 2013, as stock gauges from Sydney to Hong Kong tumbled. Equities worldwide have lost more than US$5 trillion in value since China's shock currency devaluation on Aug 11, with US shares succumbing to the selloff at the end of last week.
"Things are probably going to get worse before they get better," Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd, which oversees about US$118 billion, said by phone. "You really need rate cuts and more policy easing in China. In the meantime, things can get worse. We've got to see more clarity around the Fed" and its timeline for raising interest rates.
Hong Kong's Hang Seng Index, which entered a bear market last week, fell 3.5 per cent. Japan's Topix index dropped 3.3 per cent, heading for a correction. Singapore's Straits Times Index slid 2.3 per cent, set for a three-year low. The Shanghai Composite Index tumbled 5.6 per cent, while Australia's S&P/ASX 200 Index retreated 2.6 per cent. New Zealand's NZX 50 Index lost 2 per cent.
Calm in the US stock market was shattered last week, with volatility soaring by the most on record as the Dow Jones Industrial Average entered a correction and investors dumped the biggest winners of 2015. E-mini futures on the Standard & Poor's 500 Index fell 1 per cent Monday.
Taiwan on Sunday slapped a ban on short-selling of borrowed stocks at prices lower than the previous day's close, while South Korea's finance ministry said it will act "pre- emptively" after the nation's largest exchange-traded fund suffered the biggest weekly withdrawal since its inception 15 years ago. The Taiex index slumped 3.5 per cent on Monday, while the Kospi index fell 0.7 per cent in Seoul.