Money

Asian stocks decline on China reserve ratio plan

By Jonathan Burgos and Shani Raja (China Daily)
Updated: 2010-05-04 09:25

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SINGAPORE - Asian stocks dropped for the fourth time in five days after Australia unveiled plans to impose the world's heaviest tax regime on mining companies and China increased bank reserve ratios for a third time this year.

BHP Billiton Ltd and Rio Tinto Ltd sank at least 3 percent. Industrial & Commercial Bank of China Ltd fell 1.6 percent in Hong Kong.

The MSCI Asia Pacific excluding Japan Index slipped 1.2 percent to 422.51 in evening trade in Hong Kong. The gauge has increased 12 percent from its low this year on Feb 8 as better-than-estimated economic and earnings reports worldwide offset concerns a debt crisis in Europe will damp growth.

The European Union at the weekend agreed to a 110 billion-euro ($146 billion) rescue package for Greece to prevent a default. "The Greek rescue package hasn't curbed speculation that more countries will require similar bailouts," said Tim Schroeders, who helps manage about $1.1 billion at Pengana Capital Ltd. "The new Australian resources tax is an unwelcome burden and Chinese demand may cool."

Hong Kong's Hang Seng Index slid 1.4 percent and Australia's S&P/ASX 200 Index declined 0.5 percent. South Korea's Kospi Index dropped 1.2 percent, while Taiwan's Taiex Index slipped 0.7 percent. Markets in the mainland, Japan, Thailand and Philippines were closed for holidays.

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