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Hong Kong - World stock markets fell in light trading on Friday, led lower by automakers after officials in China, the world's biggest auto market, announced plans to sharply limit new vehicle registrations in traffic-congested Beijing.
Trading was light in Europe and Asia with some markets closed or only open for a half-day on Christmas Eve.
In early European trade, France's CAC-40 fell 0.2% to 3 904.47 and Britain's FTSE 100 was down less than 0.1% at 5 993.20. Both were open for a half-day of trading. Germany's DAX and markets in the US were closed.
Hong Kong's Hang Seng Index closed 0.3% lower at 22 833.90 in abbreviated trading, the Shanghai Composite index declined 0.7% to 2 835.16 and the Shenzhen Composite Index for China's smaller, second market fell 1.8% to 1 292.02. South Korea's Kospi slipped 0.4% to 2 029.60.
Chinese carmakers led the decline. Dongfeng Motor Group, which operates a joint venture with Nissan, tumbled 7.9% on the Hong Kong exchange. Geely Automobile Holdings, which bought Sweden's Volvo from Ford earlier this year and is also listed in Hong Kong, dropped 6%. Shanghai Automotive Industry, which has joint ventures with General Motors and Volkswagen, fell 2.3% in Shanghai.
Korean and Japanese automakers also lost ground. Hyundai fell 2.2%. Nissan, Honda and Toyota also dipped.
"Carmakers have had a good past year or two," said Ben Kwong, chief operating officer at KGI Securities. But now, auto sales "have created a lot of social problems, such as air pollution and traffic congestion, so I think government policy is less friendly than before."
China's government has been pushing the auto industry as a key growth sector, but now it's grappling with social problems that come with heavy car ownership.
The Nikkei 225 stock average lost 0.6% to 10 279.19, reopening after a national holiday on Thursday. A stronger yen weighed on Japanese exporters, with Sony off 0.4%. The dollar was trading under the ¥83 line on Friday.
Sentiment was lacklustre across the region as many markets around the world headed into the Christmas holidays.
"Investors prefer to stay on the sidelines for the time being, waiting for fund managers to come back from holidays in the beginning of next year," Kwong said.
Trading in China was also weak because of fears that the government would announce further tightening policies over the holiday weekend aimed at easing rising prices that threaten to upset economic stability.
"Investors withdrew cash from the market as they are still worried the government would take more actions to curb inflation at the year's end," said Peng Yunliang, an analyst at Shanghai Securities, in Shanghai.
Key indexes in Australia, New Zealand and Taiwan also retreated, while those in India and Singapore advanced.
In currencies, the dollar was trading at ¥82.94 from ¥82.95 late on Thursday. The euro stood at $1.3137 from $1.3114.
Benchmark oil for February delivery rose $1.03 to settle at $91.51 as the positive US economic news helped push up the price to its highest level in more than two years.
