Chinese stocks drop, other Asian markets mixed

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BEIJING (AP) — Chinese stocks fell Tuesday despite official efforts to shore up slumping prices while other Asian markets were mixed after Greece’s spiraling crisis weighed on Wall Street.

KEEPING SCORE: The Shanghai Composite Index fell 2.9 percent to 3,668.59 and Hong Kong’s Hang Seng shed 1 percent to 24,972.54. Tokyo’s Nikkei 225 gained 1.4 percent to 20,386.70. Singapore, Bangkok and New Zealand also rose. Seoul’s Kospi shed 0.7 percent to 2,040.11 and Sydney’s S&P/ASX 200 jumped 2 percent to 5,585.40.

CHINA’S DECLINE: Chinese shares have fallen nearly 30 percent after hitting a peak June 2. Most Chinese indices still are up about 80 percent after starting an explosive rise late last year. But many small investors jumped in late and bought shares near their peak, which leaves many facing losses. Increasingly frantic official measures to stop the decline include a weekend pledge by state-owned brokerages to buy shares and a promise from the central bank of more credit to finance trading. That helped to drive a 2.4 percent rebound Monday in the Shanghai index but analysts say artificial measures cannot keep prices up without improved fundamentals at a time when economic growth is near a two-decade low.

ANALYST’S TAKE: “China’s leadership has doubled down on its efforts to prop up equity prices because it believes that its own credibility is now coupled to continued gains on the markets,” said Mark Williams of Capital Economics in a report. “It is following a risky path. Our view remains that a market rally cannot run ahead of economic fundamentals indefinitely,” he said. “There is a good chance that the market rescue efforts are seen to be a failure in a few months’ time.”

GREECE: Hopes for more talks between Greece and its creditors rose after Greek Minister Yanis Varoufakis quit, which analysts saw as a possible peace overture from Athens. But little time is left and Greek banks are running short of cash. In a referendum Sunday, a higher-than-expected 61 percent of Greeks voted “no” on demands for spending cuts and tax hikes in exchange for more bailout money. Many in the markets fear that the Greek vote has pushed the country one step closer to leaving the euro. The European Central Bank has been providing emergency credit to the banks, but on Monday said it could not increase the amount offered because the banks’ collateral was weaker now.

WALL STREET: Stocks in the U.S. fell broadly Monday following drops in overseas markets as Greeks voted to reject creditor conditions for more loans, but the losses weren’t as steep as many had feared. The Dow Jones industrial average fell 46.53 points, or 0.3 percent, to 17,683.58. The S&P 500 gave up 8.02 points, or 0.4 percent, to 2,068.76. The Nasdaq composite fell 17.27 points, or 0.3 percent, to 4,991.94.

ENERGY: Benchmark U.S. crude rose 45 cents to $52.98 per barrel in electronic trading on the New York Mercantile Exchange. On Monday, the contract plummeted $4.40 to $52.53 on concern about a possible European slowdown triggered by the Greek crisis. Brent crude, used to price international oils, rose 55 cents to $57.08 in London. It dropped $3.78 in the previous session to $56.54.

CURRENCIES: The dollar inched down to 122.63 yen from 122.64 yen in the previous trading session. The euro declined to $1.1039 from $1.1056.