China drives Asian markets down

Shaghai's market opened depressed after a major property developer, China Vanke, unveiled plans for a big share offer and the regulator approved another major listing. Shanghai Composite Index was up 0.1 per cent by late morning.

In reaction, Japanese shares fell 1.6 per cent following the Nikkei average closing at a10-month high the previous day with exporters like Canon cooling off and markets remaining cautious ahead of the national elections due Sunday.

The MSI index of Asia-Pacific shares excluding Japan slid 0.2 per cent and the index lost roughly 3 per cent since it hit an 11-month high this month amid growing concerns that share prices have raced ahead of fundamentals.

Mitsubishi Corp which jointly owns the world's biggest exporter of coking coal, slid 2.1 per cent while Mitsui OSK Lines Ltd which operates the largest fleet of iron-ore ships in Japan tanked 1.6 per cent. Sumitomo Chemical Co which trades at 748 times estimated earnings slipped 2.6 per cent.

According to analysts the prices fully reflect a possible V-shaped recovery in company earnings next year. They say with no certainty that such recovery would actually happen speculators seem to be having a field day.

They say a sense of fatigue is setting in among investors who are resorting to profit-taking with the external environment that spurred the market showing signs of weakening. They add that the US market could be entering a correction phase and the direction of Chinese stocks would remain uncertain.