2013.06.2504:36:36UTC+00Shanghai retreats again, slamming Asian stocks

Mainland Chinese stocks tumbled Tuesday, diving further into bear market territory and dragging down other Asian markets on worries that Beijing’s reluctance to provide relief in the interbank money markets may have a wider economic impact.

Rest of Asia suffers

Meanwhile, most other regional markets, which had risen earlier in the day, let those gains slip by as losses in Shanghai steepened.

Hong Kong’s Hang Seng Index lost 1.2%, and Japan’s Nikkei Stock Average shrank 1.3% in a swift retreat from earlier gains.

Australia’s S&P/ASX 200 and South Korea’s Kospi declined 0.7% each, with trading volatile.

“The global selloff has accelerated after China credit issues have increasingly become a concern for investors,” said Rivkin Securities global analyst Tim Radford.

However, “with the rising repo rates in China a product of intentional government intervention, the selloff is getting to a point whereby it looks overdone," he said.

The retreat in Hong Kong was led by losses for Chinese banks, with property stocks also suffering broad declines.

The Hong Kong-listed shares of China Minsheng Bank plunged down 3.9%, with Agile Property Holdings Ltd. sliding 3.3%, and Beijing North Star Co. shedding 3.1%.

“In [the] near term, we see limited liquidity risk on developers due to disciplined investment and sufficient funds available. However, highly-geared developers may confront higher financing pressure if the situation does not improve,” Jefferies analysts led by Christie Ju wrote to clients.