Lagenda Temasek

Chinese stocks had a miserable week as persistent concerns about moves to tighten policy and worries about bank fundraising prompted the market's worst run of losses for 16 months.

The Shanghai Composite fell for six consecutive sessions, shedding 5.4 per cent, before managing to inch up 0.1 per cent yesterday to 2,870.61.

Over the week, the index fell 3.8 per cent and it recorded a 7.7 per cent slide in April - its biggest monthly loss since January. It has fallen 12 per cent since the start of the year.

But traders noted that the poor performance of Shanghai was having less of an impact on other regional markets than at the start of the year. The FTSE Asia Pacific-ex Japan index has risen 1.2 per cent since January amid optimism that the recovery in the region was gathering pace.

"Domestic drivers continue to provide significant support for many Chinese and Asian companies, although tighter monetary policy in China is causing investors to reconsider the prospects for certain sectors," said Ronnie Petrie, head of Asia-Pacific equities at Standard Life Investments.

Mainland banks came under pressure for much of the week from concerns about potentially dilutive fundraising plans. But the sector rallied yesterday following news of bumper quarterly profits at several major lenders.

China Construction Bank climbed 1 per cent to Rmb5.25 and its Hong Kong-listed shares jumped 4.2 per cent to HK$6.43, leaving them 1.7 per cent up over the week.

Other mainland banks had similar rallies in Hong Kong, helping the Hang Seng index snap a three-day losing streak and finish 1.5 per cent higher at 21,108.59. Over the week, the index shed 0.6 per cent and it also slipped in April as a whole after two months of gains.

Worries about the escalating eurozone debt crisis weighed on clothing manufacturer Esprit , which has heavy exposure to Europe. Although the stock rallied yesterday, it still ended the week 5.3 per cent lower at HK$56.75.

Tokyo had a brighter time of it, although activity was subdued by a holiday on Thursday and the onset of Golden Week holidays next week.

The Nikkei 225 Average rose 1.2 per cent yesterday to 11,057.40, leaving it 1.3 per cent higher over the week - its first weekly advance in four - as corporate earnings provided positive surprises. It fell 0.3 per cent over the month.

However, Honda Motor fell 2.1 per cent yesterday to Y3,215 after it forecast a smaller than expected 10 per cent rise in operating profits for the full year. The stock was unchanged over the week.

Mumbai rose for the third successive month, with the BSE Sensex edging up 0.2 per cent. Australian stocks fell 1.4 per cent in April.