Asian markets drop on waning optimism (AP) (29-07-2009)

HONG KONG (AP) -- Asian markets declined on Wednesday as investors were concerned that the recent rally was creating a bubble; Shanghai's market plunged nearly 8 percent as the world's biggest IPO this year started trading in China, before recovering some of the losses.

Japan's Nikkei 225 stock average closed up 25.98 points, or 0.3 percent, at 10,113.24 during a seesaw session, and South Korea's Kospi inched down 0.1 percent. Markets in Taiwan, Australia and India also lost ground.

In China, Shanghai's main index plummeted nearly 8 percent before clawing back some losses, ending down 171.94 points, or 5 percent, at 3,266.43. Hong Kong's Hang Seng retreated 504.40, or 2.5 percent, to 20,120.14.

Both markets had soared over the last two weeks, with several recent IPOs only stoking interest in stocks, but talk of an asset bubble in recent days may have led investor to cash in.

China State Construction Engineering was up nearly 80 percent from its IPO price by midmorning before trading at a mere 61 percent premium in Shanghai. The company, which built the "Water Cube" swimming center for the Beijing Olympics, is the world's biggest initial public offering since March 2008.

Oil prices were lower in Asia, with benchmark crude for September delivery down $1.32 at $65.91 a barrel. The contract lost $1.15 overnight.

In currencies, the dollar lost ground to 94.21 yen from 94.47 yen. The euro traded at $1.4161 compared to $1.4172.

Source: AP