Asian shares gave up early gains to end mostly lower on Tuesday as the yuan resumed its decline against the dollar and Chinese shares came under heavy selling pressure despite news of fresh cash injection and positive home-price data. Investors also looked ahead to the minutes from the Federal Reserve's July policy meeting due on Wednesday for possible clues on the timing of an interest-rate hike.
Chinese shares reversed a brief positive open to end deep in the red despite signs of recovery in the housing market and a large cash injection into the financial system. The benchmark Shanghai Composite index slumped 245.50 points or 6.15 percent in a late sell-off, its biggest drop in three weeks, once again bringing the key index below the 3,800 point mark.
Average home prices in majority of the Chinese cities rose in July for a third consecutive month, although the annual growth is still negative, official data showed. July prices fell an annual 3.7 percent, an improvement over June's 4.9 percent decline.
Earlier in the day, the People's Bank of China offered 120 billion yuan ($18.77 billion) worth of seven-day reverse repurchase agreements in a routine money-market operation, reflecting growing concerns about capital outflows following its recent move to weaken the yuan. The yuan weakened against the dollar today despite the central bank setting the midpoint rate a tad higher than the previous day's fix of 6.3969.
Hong Kong's Hang Seng index ended down 339.68 points or 1.43 percent at a six-month low 23,474.97, extending its slide for the third straight day.
Japanese shares reversed early gains to end modestly lower as the dramatic sell-off in China fueled worries about its ability manage a slowdown. The benchmark Nikkei average fell 65.79 points or 0.32 percent to 20,554.47, while the broader Topix index of all first-section shares ended marginally lower at 1,672.22. Oil refiner JX Holdings tumbled 3.6 percent and Inpex Corp dropped 1.5 percent as oil prices hit a new six-year low on increasing worries about a global glut of crude supplies in the face of sluggish demand.
Shares of Toshiba closed on a flat note on a Nikkei report that the industrial conglomerate will announce seven outside directors as part of board revamp following an accounting scandal. Market heavyweight Fast Retailing dropped 1.8 percent and Softbank Corp eased 0.9 percent, while Fanuc gained 1.6 percent.
Banks rose broadly, with Sumitomo Mitsui Financial, Mitsubishi UFJ Financial and Mizuho Financial closing up between 0.8 percent and 1.6 percent. Shipping stocks gained ground as the dry bulk freight markets showed some improvement. Mitsui OSK Lines rallied 2.4 percent and Kawasaki Kisen Kaisha advanced 1.7 percent. Discount store operator Don Quijote Holdings fell 1.7 percent after posting lower than expected operating profit.
The Australian market swung between gains and losses before closing deep in the red, dragged down by banks after global ratings agency Fitch Ratings said a further increase in capital in the country's four largest banks was likely over the medium term. The benchmark S&P/ASX 200 index rose as much as 0.4 percent before reversing direction to end the session down 64.6 points or 1.2 percent at 5,303 amidst the sell-off in mainland Chinese shares. The broader All Ordinaries index dropped 59.2 points or 1.1 percent to finish at 5,309.
Lender ANZ dropped 1.9 percent after posting a modest rise in cash profit for the first nine months of its fiscal year. NAB lost 1.6 percent and Westpac eased 0.9 percent, while Commonwealth Bank of Australia slumped 5.4 percent on going ex-dividend. Mining giant BHP Billiton fell 0.9 percent and Rio Tinto shed 0.6 percent after Goldman Sachs Group forecast iron ore prices to tumble about 30 percent over the next 18 months.
Smaller rival Fortescue Metals soared 7.9 percent after the company played down speculation that it is weighing a A$2 billion deal on its Chichester hub in the Pilbara. Oil & gas producer Santos and Oil Search closed down over 2 percent each. After falling to a fresh six-year low overnight, crude prices extended losses in Asian deals as investors looked ahead to the U.S. rig count data due out later in the day for direction.
Sonic Healthcare declined 1.7 percent on reporting a 5.6 percent decline in full-year profit. Funeral services firm InvoCare tumbled 6.4 percent on the back of a lackluster interim profit result. QBE Insurance rose 0.4 percent after posting solid half-year results and flagging higher dividends for investors in 2016. Asciano shares soared 7.2 percent after the rail and freight operator's board recommended an improved cash and scrip bid from Brookfield Infrastructure Partners.
In economic news, the minutes of the Reserve Bank of Australia' August board meeting revealed optimism about the economy, with board members citing favorable monetary policy and very low interest rates as main factors in the country's economic recovery. The minutes noted that Australia's economy is adjusting to a weaker currency and the end of the mining investment boom.
Separately, data from the Australian Bureau of Statistics showed that the total number of new motor vehicle sales in Australia fell a seasonally adjusted 1.3 percent in July from the previous month after a 3.8 percent jump in June.
Seoul shares fell as foreign investors continued their selling spree amid continued fears over yuan devaluation and the uncertainty surrounding the timing of the Federal Reserve's first interest-rate increase in nearly a decade. The benchmark Kospi average slid 12.26 points or 0.62 percent to close at 1,956.26, dragged down by food manufacturers and chemical companies.
Confectionery maker Orion plummeted 10.7 percent and LG Chemicals lost 2.3 percent. Automaker Hyundai Motor added 2.1 percent as the South Korean won extended losses for a second day. LG Display advanced 2.7 percent after the world's largest maker of LCD displays said it would focus on the OLED segment.
New Zealand shares fell as investors waited to take cues from the ongoing earnings season. The benchmark NZX-50 index dropped 16.65 points or 0.29 percent to 5,710.77. While Kathmandu Holdings, Fletcher Building, Spark New Zealand, Sky Network Television and Xero fell around 2 percent each, Metro Performance Glass led the gainers on the exchange, climbing 9.1 percent to $1.44.
Elsewhere, Indonesia's Jakarta Composite index was tumbling 1.6 percent, Singapore's Straits Times index was down 0.3 percent and the Taiwan's Weighted average shed 0.4 percent, while Indian shares were marginally higher and Malaysia's KLSE Composite index was up half a percent.
The Thai baht hit its lowest level in more than six years amid heightened uncertainty after deadly bomb blasts rocked the country's capital Bangkok late Monday. Bank Indonesia today kept its benchmark interest rate steady at 7.50 percent, saying its focus was to maintain rupiah stability.
U.S. stocks closed higher on Monday as investors shrugged off disappointing manufacturing data and focused on a strong reading from the housing sector. The Dow, the S&P 500 and the Nasdaq rose between 0.4 percent and 0.9 percent, led by gains in biotech and media shares.
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