According to a report from the Wall Street Journal,"the Shanghai Composite and Hong Kong's Hang Seng Index closed 1.5% and 1.7% lower, respectively, after news that China's four state-owned banks and a former state policy bank will issue a total of 19 billion yuan ($3.1 billion) of negotiable certificates of deposit, the latest step in China's move toward less-restricted interest rates. Liberalization has prompted concerns that the banks will face short-term pressure on their profits".
"Unlike ordinary bank deposits, the interest rate on the new certificates requires the banks to negotiate the cost of capital among themselves.
In Hong Kong, Agricultural Bank of China and China Construction Bank fell 2% and 2.4%, respectively, while HSBC Holdings PLC, the single-largest constituent on the Hang Seng Index, fell 1.3% after it said it had agreed to sell its 8% stake in Bank of Shanghai to Spain'sBancoSantander SA . HSBC didn't say how much it was selling the stake for, but it valued the holding at $468 million on Sept. 30.
Speculation over when the Fed will start to roll back its $85 billion-a-month bond-buying program has been a persistent theme in Asia since the early summer, when it sparked a series of selloffs in the region. Recent employment data from the U.S. has been strong, which has raised expectations that the Fed could start to withdraw its stimulus when its next policy meeting convenes, next week, giving trading a general air of caution.
This caution could be seen in the dollar's movement against the yen, with the greenback losing a total of 0.4% against its Japanese counterpart overnight and last trading at ¥102.73 compared with ¥102.84 late Tuesday in New York.
The yen's strength weighed on Japanese stocks. The Nikkei closed 0.6% lower at 15515.06.
South Korea's Kospi fell 0.8% to 1977.97.
In Australia, the S&P/ASX 200 fell 0.8% to 5104.20, a 3½-month low, as investors continued to worry about the impact of a flurry of initial public offerings hitting the market before the end of the year".
