Asian Bears Maul China’s Shanghai, Japan’s Nikkei and the Philippine PSEi!

Rampaging bears continue to wreak havoc on a growing number of Asian equities

Chinese stocks represented by the Shanghai index went into a wild intraday rollercoaster ride before succumbing to the bears. The Shanghai index sank 3.23%

Yet one of the biggest cash injections in three years by the central bank today has only had a momentary effect. This failed to stop bears from dominating the day's session.

From Bloomberg

Chinese stocks tumbled as the central bank’s biggest cash injection in the financial system in three years failed to ease concern that the nation’s economic slowdown will deepen.

The Shanghai Composite Index slid 3.2 percent to 2,880.48 at the close. Hong Kong’s Hang Seng China Enterprises dropped 2.2 percent to the lowest level since March 2009. Hong Kong stocks fell below the value of their net assets for the first time since 1998. Property developers led declines on concern higher borrowing costs will crimp earnings after the three-month Hong Kong Inter-Bank Offered Rate climbed to the highest level in more than six years.

China cranked up cash injections in its money-market operations after a gauge of interbank funding availability in the mainland jumped the most in 13 months on Wednesday. The government is trying to hold borrowing costs down to support its economy without spurring an exodus of funds that drove the yuan to a five-year low this month. The People’s Bank of China said Thursday it conducted 110 billion yuan ($16.7 billion) of seven-day reverse-repurchase agreements and 290 billion yuan of 28-day contracts.

Part of the reason for today’s loss may likely be due to the ascent by the USD CNH.

Today’s loss essentially erased the 3% jump predicated on the bad news (lower GDP) equals good news (MORRREEE stimulus) last Tuesday. Today's loss dragged the Shanghai index to its lowest level since December 2014.

Meanwhile, Japan’s benchmark, the Nikkei's entry to the bear market yesterday was followed up today by another selling spree.

Like China's Shanghai, the Nikkei 225 had a tumultuous intraday action. The Nikkei soared at the early going, to reach almost 2%, and unfortunately in seeming coincidence with the Shanghai, plunged towards the close.

The Nikkei has now fallen to late 2014 levels.

Asian equities were mostly red today as shown by the Reuters monitor

Among emerging Asia, the Philippine PSEi suffered the largest drubbing; down 2.8%.

Since the record high last April 2015, as of today the PSEi has shed a remarkable 25.14%! The PSEi seems to be having a China's Shanghai index moment.

One Philippine official indirectly blames 'irrationality' to the ferocious bear market activities. He stated that current actions “did not arise from a careful evaluation of corporate returns”, so he concludes that "Eventually, investors will begin differentiating emerging economies as the dust of uncertainty settles down"

Stock markets are supposed to work as forward discounting mechanism, so whatever G-R-O-W-T-H that had happened in the past may not be the future—which is what the current bear market seems all about.

Yet today's performance, as indicated on the table above, already suggests that markets have been differentiating. Unfortunately, they are pointing to the opposite direction than the one suggested by the official. 

Of course, the official’s perspective could most likely be the sentiment of establishment consensus.

Oh by the way, I forgot to add another Asian bear market recruit: as of yesterday, Taiwan's equity benchmark, the TWSE, enlisted to became a member. 

The entry to the bear market by the TWSE suggest that there won't likely be a post election honeymoon for first female president Tsai Ing-wen, who represented the opposition and won by a landslide last weekend.