Mainland markets fall
Despite the PBOC unveiling a bigger-than-expected easing package over the weekend, the correction in China's Shanghai Composite index showed no signs of braking, with the Shanghai bourse closing down 3.3 percent at its lowest level since April 16.
The PBOC lowered its benchmark lending rates by 25 basis points to 4.85 percent and reduced one-year benchmark deposit rates by 25 basis points to 2 percent on Saturday. The rate cuts come on the back of a drastic 7.4 percent plunge on Friday, which saw the Shanghai Composite nursing its worst single-day loss since January 19. For the past two weeks, the index has fallen more than 20 percent.
"We haven't seen [such easing] since the crisis in 2008 [and] this opens up a lot of room to support the market. This came on the back of broad issues revolving the fundamentals in the economy and a 20 percent correction in the stock market," Neeraj Seth, head of Asian Credit at BlackRock, told CNBC. "These are clear signs that the government is serious about the economy and stock market stability."
However, Monday's slump showed the Chinese central bank has failed to remedy the stock market fluctuations.
"It appears that the forced clearance of leverage accounts continued to be the dominant driver of the market at the moment. If the meltdown continues at the current pace, which could trigger systemic instability, we would expect further stabilizing measures from the government," wrote Aidan Yao, senior emerging market economist at AXA Investment Managers, citing the examples of asking institutions to halt the squaring of leverage accounts, and allowing state-owned investment funds to invest more in the equity market.
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In Hong Kong, Legend Holdings, parent of computer maker Lenovo Group, reversed direction to close down modestly in its market debut. The initial public offering (IPO) worth about $2 billion would be the largest IPO in Hong Kong since Dalian Wanda Commercial Properties raised $4.04 last December.
Despite the lackluster debut, Dickie Wong, executive director of Kingston Securities, told CNBC the move was in line with his expectations. "I didn't expect much upside on its first debut. [Despite the worries over Greece,] I think thy picked a good day today [because] if they had listed last week like Thursday or Friday, it could have been worse," Wong told CNBC.
Shares of Lenovo Group plunged nearly 6 percent. Meanwhile, the Hang Seng index shaved off 2.6 percent to end at its lowest level since April 8.