China markets lower on higher tax on share transactions
by Elaine Frei
Asian and European equities markets were lower on Wednesday after exchanges in China fell significantly after the government there tripled the stamp duty tax on share transactions. The Shanghai Composite closed 6.5 percent lower on the session to 4,053.01 after falling as much as 7.4 percent during the day. The Shanghai and Shinzhen 300, which indexes both the Shanghai and Shinzhen exchanges, dropped 6.8 percent to close at 3,859.9.
Elsewhere in Asia, the Straits Times index in Singapore fell 0.62 percent to 3,511.13. In India, the Sensex dropped 0.67 percent to 14,411.38, while the Hang Seng index was 0.86 percent lower in Hong Kong to close at 20,293.76. The Sydney Ordinaries fell 1.06 percent to 6,271.7 in Australia. In Tokyo, the Nikkei 225 was down 0.5 percent to 17,588.26, while the Topix index closed at 1,733.75 for a decline of 0.2 percent.
European markets followed the Asian markets lower. The FTSE Eurofirst 300 dropped 0.16 percent to 1,598.77. In the continental markets, the Dax in Frankfurt was 0.21 percent lower to 7,764.97, while in Paris the CAC-40 was down 0.24 percent to 6,042.15. In Madrid, the IBEX fell 0.34 percent to 15,137.3.
In London, the FTSE 100 dropped 0.07 percent to 6,602.1 and the FTSE 250 was 0.69 percent lower to 12,023.2.
The markets were mixed at midday on Wall Street. The Dow Jones Industrial Average was steady at 13,521.99, while the Nasdaq Composite had dropped 0.1 percent to 2,569.63. The S&P 500 was fractionally higher to 1,518.5.
Crude oil prices were mixed on the day, with Brent lower but West Texas Intermediate a bit higher. Base metals were also mixed, with most lower on the session.
Low-yield currencies such as the yen and the Swiss franc benefited from the decline in China’s markets, while the US dollar advanced in relation to major currencies. Prices on US Treasury bonds were higher and yields dropped slightly after the Federal Reserve released the minutes of its May meeting, in which the Fed called inflation still “uncomfortably high”.
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