Only a day after leading risk assets higher, Chinese stocks fell heavily in Wednesday trade, dragging stocks, commodities and higher-yielding currencies lower across the region.
The benchmark Shanghai Composite index closed the session down 1% at 2,976.69, giving back around a third of the gains achieved on Tuesday.
At one point during the session the index was down by close to 2%.
The steep decline in Chinese stocks, not only on the benchmark index but others around the country, weighed on markets across the region.
The ASX 200 in Australia finished down 1.26% at 4,841.52, the lowest closing level seen in 30 months.
However, compared to other markets across Asia, that was a relative outperformance.
The Nikkei 225 in Tokyo fell by 3.71%, closing the session at 16,416.19. Not only was it the lowest closing level since October 2014, it took its decline from August 2015 to 21.6%.
It is now in an official bear market.
In late trade the Hang Seng is also under the kosh, down 3.63% at 18,923.70. It is on track to close at the lowest level since July 2012, and has extended its slide from April last year to around 34%.
Like the Nikkei chart above, it doesn’t make for pleasant viewing.
Stocks in South Korea, Singapore and Taiwan also logged declines of around 2%.
US S&P 500 futures, mirroring the carnage in Asia, currently trade down 1.63%.
Combined with modest weakness in the offshore traded yuan, commodity markets were also under pressure with US crude futures tumbling to a fresh 13-year low below $28 a barrel.
The low for the session, so far, is $US27.49 a barrel.
Gold is one of the few exceptions, adding 0.49% to $US1,092.06 an ounce.
Higher-yielding currencies were also hit hard, particularly the New Zealand dollar which tumbled earlier in the session following a weak inflation report for the December quarter.
The Australian dollar was also under pressure, falling 0.85% to .6852. Like Tuesday, its movements were closely aligned with those in Chinese stocks.
The chart below from Thomson Reuters reveals the somewhat mysterious relationship between the two seen earlier in the session.
Here’s the Asia market scoreboard as at 6.00pm AEDT.
Stocks
- ASX 200 4841.53 , -61.54 , -1.26%
- Nikkei 225 16416.19 , -632.18 , -3.71%
- Shanghai Composite 2976.52 , -31.22 , -1.04%
- Hang Seng 18923.70 , -712.11 , -3.63%
- KOSPI 1845.45 , -44.19 , -2.34%
- Straits Times 2568.28 , -70.19 , -2.66%
- S&P 500 Futures 1842.50 , -30.50 , -1.63%
Forex
- USD/JPY 116.62 , -1.00 , -0.85%
- USD/CNY 6.5971 , 0.0071 , 0.11%
- AUD/USD 0.6852 , -0.0051 , -0.74%
- NZD/USD 0.6369 , -0.0039 , -0.61%
- AUD/JPY 79.91 , -1.28 , -1.58%
- EUR/USD 1.0951 , 0.0046 , 0.42%
- GBP/USD 1.4149 , -0.0006 , -0.04%
- USD INDEX 98.798 , -0.1930 , -0.19%
Commodities
- Gold $1,092.06 , $5.34 , 0.49%
- Silver $14.02 , $0.00 , -0.02%
- WTI Futures $27.61 , -$0.85 , -2.99%
- Copper Futures ¥35,070 , -¥60 -0.17%
- Iron Ore Futures ¥316.00 , -¥3.50 , -1.10%
10-Year Bond Yields
- Australia 2.662%
- New Zealand 3.225%
- Japan 0.212%
- Germany 0.520%
- UK 1.690%
- US 1.998%