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Asia stocks hit by Greek fears, China trade move

Hong Kong - Asian markets mostly retreated on Monday following losses on Wall Street as fears over Greece returned, while Shanghai and Hong Kong tumbled after Chinese authorities unveiled restrictions on dealers borrowing cash to trade shares.

The mainland clampdown, announced Friday, offset news at the weekend that the Chinese central bank had reduced the amount of cash which banks must keep in reserve - a bid to boost loan activity.

Shanghai sank 1.64% to 4 217.08 and Hong Kong fell 2.02% to 27 094.93. Sydney shed 0.76% to close at 5 833.1.

Tokyo was marginally lower, easing 18.39 points to 19 634.49, but Seoul closed 0.15% higher, adding 3.21 points to 2 146.71.

The People's Bank of China Sunday announced it would cut one percentage point off the reserve ratio requirement, the second reduction this year and the latest monetary easing measure aimed at kickstarting growth in the world's number-two economy.

It has also cut interest rates twice since November.

However, on Friday the China Securities Regulatory Commission announced tighter rules on margin trading - where investors buy shares mostly with borrowed money - which has helped propel the recent rally.

At the same time authorities made it easier to short-sell, or bet against stocks.

The Hong Kong and Shanghai share markets have been soaring as investors speculate that Chinese leaders will continue to loosen monetary policy to counter a sharp slowdown.

"Investors are taking profits in China," said Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank.

"The clampdown initiated by securities regulators is adding to the sell-off and the weak investor sentiment is spreading to other markets in the region," he told Bloomberg News.

Shanghai has more than doubled over the past year, while Hong Kong has surged about 18% this year.

On Wall Street Friday the Dow sank 1.54%, the S&P 500 fell 1.13% and the Nasdaq dropped 1.52% on fears about Greece's future in the eurozone as it struggles to secure the release of much-needed bailout cash.

'Uncharted waters'

Athens was told Saturday to urgently deliver a detailed fiscal and debt plan to official lenders, while European Central Bank chief Mario Draghi cautioned that not reaching an agreement would take the situation into "uncharted waters".

There are fears that if the country does not service its huge debts it will default and tumble out of the eurozone, fuelling worries about the knock-on effects for the global economy.

European stocks fell sharply Friday, with Germany's DAX 30 index tumbling 2.58% and France's CAC 40 in Paris down 1.55%.

On foreign exchange markets the euro edged down to $1.0790 and ¥128.10 from $1.0810 and ¥128.49 in New York on Friday.

The dollar fetched ¥118.71 compared with ¥118.86.

Oil prices were higher. US benchmark West Texas Intermediate for May delivery gained 44 cents to $56.18 while Brent crude for June added 28c to $63.73.

Gold fetched $1 200.30 against $1 205.91 late on Friday.

In other markets:

- Mumbai fell 1.95% to end at 27 886.21.

Reliance Industries fell 4.46% to 885.55 rupees, while Sun Pharamceutical Industries rose 0.66% to 1 044.10 rupees.

- Jakarta closed down 0.18% to 5 400.80.

Palm oil producer Astra Agro Lestari fell 1.19% to 22 825 rupiah, while lender Bank Negara Indonesia rose 1.77% to 7 175 rupiah.

- Bangkok closed down 0.42% at 1 560.32.

- Oil company PTT fell 2.49% to 352.00 baht, while Siam Commercial Bank dropped 2.57% to 170.50 baht.

- Malaysia's main index gained 0.15% to close at 1 848.66.

Telekom Malaysia added 0.68% to 7.40 ringgit, Tenaga rose 0.55% to 14.52 while Maybank eased 0.11% to 9.48 ringgit.

- Singapore fell 0.62% to close at 3 503.25.

Singapore Airlines rose 0.50% to Sg$12.00, while Singapore Telecom fell 1.12% to Sg$4.41.

- Wellington fell 0.63% to 5 824.28.

Air New Zealand was down 0.72% at NZ$2.76 and Chorus was off 0.33% at NZ$3.02.

- Taipei fell 0.19% to 9 552.85.

Taiwan Semiconductor Manufacturing edged up 0.35% to Tw$143.0 while Cathay Financial Holding was 0.59% lower at Tw$50.3.

-Manila slipped 1.03% to 7 865.27.

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