Chinese stocks lead the fall on all bourses

Investors across Asia are concerned that rising energy costs and interest rates will hurt consumers and eat away at profits, dealers said.

In Shanghai, share prices fell 7.7 per cent, the biggest one-day percentage loss in about one year after the Chinese central bank announced fresh credit-tightening measures to fight inflation.

Thai shares fell 1.69 per cent to 791.94, dipping below the psychological 800-point level.

Hong Kong fell 4.2 per cent while Sydney lost 2.8 per cent. Seoul shed 1.9 per cent and Tokyo gave up 1.1 per cent.

"Beijing's latest move on credit tightening sent further blows to the already weak market after four consecutive trading day losses," said Yan Li, an analyst with Southwest Securities in Shanghai.

She said the bank's move was a surprise, as the market had not anticipated any further tightening ahead of inflation figures later this week.

The People's Bank of China raised the reserve ratio for commercial banks for the fifth time this year, a move that is expected to curb bank lending and slow economic growth and investment flow into the stock market.

"The downward adjustment of the Stock Exchange of Thailand tracks the regional trend on concerns about higher oil prices and inflationary pressures, which hurt economic growth," said Warut Siwasariyanon, vice president of Global Securities' Research Department.

Besides, he added, foreign investors appeared to be reducing their investment weightings in the region, a major factor causing Asian currencies to weaken.

Sicco Securities analyst Saravut Techochavalit said 788 was the next level of support. The next support after that is at 750.

Among the most active stocks traded yesterday were PTT Exploration and Production, which eased 2.7 per cent to Bt179, and PTT, which fell 2.4 per cent to Bt322. Siam Commercial Bank dipped 1.8 per cent to Bt80 and Bangkok Bank fell 3.3 per cent at Bt117, while Thoresen Thai Agencies gave up 3.8 per cent to close at Bt44.25.

Oil prices rose in Asia yesterday despite efforts by leading producer Saudi Arabia to reassure consumers that it was ready to meet any increase in demand.