The Shanghai composite index cnbc_comboQuoteMove('popup_CN;SHI_ID0EFH15839609');[CN;SHI 2699.884 
-160.804 (-5.62%) 
] cnbc_quoteComponent_init_getData("CN;SHI","WSODQ_COMPONENT_CN%3bSHI_ID0EFH15839609","WSODQ","true","ID0EFH15839609","off","false","inLineQuote"); fell to a three-month low, breaking below the key 125-day moving average used by Chinese investors to delineate a bull versus a bear market, as a series of negative factors has relentlessly weighed down the market since early August.
"Liquidity worries, too much share supply and weakening investor sentiment prevailed in the market today, although these are not fresh negative factors," said Qian Qimin, deputy head of research at Shenyin & Wanguo Securities in Shanghai.
The index is on track to post a more than 20 percent loss for the month after recording seven consecutive monthly gains.
The index is well below the 125-day moving average, now at 2,755 points, although analysts said it would still take two or three days to confirm whether the key technical level has been effectively breached.
Current DateTime: 06:01:06 30 Aug 2009
LinksList Documentid: 32545794
Continuing a stream of fresh shares flowing into the market, Metallurgical of China's Shanghai A-share initial public offering, which aims to raise about 16.85 billion yuan ($2.47 billion), will start book-building on Tuesday and take subscriptions next week.
Monday's fall came after the index closed down 2.9 percent on Friday as sources familiar with the situation told Reuters that regulators warned banks not to rush into end-of-the-month lending amid signs of a steep drop in Chinese bank lending in August.
Analysts said that, while the slowdown in lending would trim liquidity flowing into stocks, it should have no major impact on the economy, partly because Chinese firms are turning a large share of the short-term discounted bill financing they received in the first half of this year into long-term investment in the second half.
"Although July data showed China's economic recovery may not be as quick as the market had once expected, it is still on track," Qian said.
Petrochina, the most heavily-weighted stock in the index, fell 5.25 percent to 13.00 yuan, after posting its first profit in three quarters on Friday as higher fuel prices in China offset a steep slide in crude oil prices.
Hong Kong’s Hang Seng index cnbc_comboQuoteMove('popup_HK;HSI_ID0ETHAC15839609');[HK;HSI 19734.71 -363.9082 (-1.81%) ] cnbc_quoteComponent_init_getData("HK;HSI","WSODQ_COMPONENT_HK%3bHSI_ID0ETHAC15839609","WSODQ","true","ID0ETHAC15839609","off","false","inLineQuote"); followed China’s downward path. China Merchants Bank skidded 4.6 percent to HK$16.64 after the country's sixth-largest lender raised its maximum fund-raising target for a planned rights issue by 22 percent, due to a likely tightening of banks' capital adequacy rules.
Singapore’s Straits Times Index cnbc_comboQuoteMove('popup_GB;STI_ID0E5MAC15839609');[GB;STI 2612.01 -30.79 (-1.17%) ] cnbc_quoteComponent_init_getData("GB;STI","WSODQ_COMPONENT_GB%3bSTI_ID0E5MAC15839609","WSODQ","true","ID0E5MAC15839609","off","false","inLineQuote"); also fell.
Japan Loses Post-Election Pop
Japan's Nikkei average cnbc_comboQuoteMove('popup_JP;N225_ID0EKCAE15839609');[JP;N225 10518.49 -15.6494 (-0.15%) ] cnbc_quoteComponent_init_getData("JP;N225","WSODQ_COMPONENT_JP%3bN225_ID0EKCAE15839609","WSODQ","true","ID0EKCAE15839609","off","false","inLineQuote"); edged lower as a stronger yen sent shares of exporters lower, erasing earlier gains to an 11-month high after an election win by the opposition.
Sunday's landslide victory for the Democratic Party, led by Yukio Hatoyama, ends a half-century of almost unbroken rule by the Liberal Democratic Party and breaks a deadlock in parliament.
“After a spatter of buying at the open, this may be it for today," said Kenichi Hirano, operating officer at Tachibana Securities.
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Market players said there was little sign of foreign investors' presence in the market and some were selling on the fact that the election was over.
"If foreign investors come in decisively in expectations of Democratic policies there's likely to be long-term support," Hirano said.
Among big stocks losing ground, Daiichi Sankyo slid 2.2 percent to 2,000 yen after some researchers said AstraZeneca's cnbc_comboQuoteMove('popup_azn_ID0EWIAE15839609');[AZN 46.30 -0.49 (-1.05%) ] cnbc_quoteComponent_init_getData("azn","WSODQ_COMPONENT_AZN_ID0EWIAE15839609","WSODQ","true","ID0EWIAE15839609","off","false","inLineQuote"); new blood thinner could prove a stronger rival to Plavix, the world's second biggest selling drug, than Daiichi Sankyo's and Eli Lilly cnbc_comboQuoteMove('popup_lly_ID0EAOAE15839609');[LLY 33.60 -0.51 (-1.5%) ] cnbc_quoteComponent_init_getData("lly","WSODQ_COMPONENT_LLY_ID0EAOAE15839609","WSODQ","true","ID0EAOAE15839609","off","false","inLineQuote");
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