Asia: Chinese stocks sink on new margin financing rules, upcoming IPOs

Stocks in Asia continued trading on the red on Tuesday ahead of Wednesday's Fed policy meeting, hurt by weakness in China's financial sector as regulators tightened margin lending regulations.

Concerns about the future of Greece's economy weighed heavily on investor sentiment, after talks between Athens and its creditors broke down over the weekend.

After a heavy fall the previous session, the Shanghai composite index plunged another 3.48%, its biggest fall in three weeks, as investors showed concerns over new rules on margin financing. Securities regulators plan to cap the companies at four times a brokerage's net capital.

Meanwhile, investors were also worried with a fresh wave of upcoming initial public offerings. According to Bloomberg, analysts expect 25 stock-market listings to tie up 6.68trn yuan ($1.08trn) of liquidity starting Wednesday.

Hong Kong's Hang Seng was also down 1.1%. The launch of the Hong Kong-Shenzhen stock market link has been delayed due to technical issues, according to Reuters, increasing concerns the country's plans to have the scheme ready by the end of this year will not be met.

In other news, Capital Economics warned in a report that Hong Kong has the highest life expectancy and the lowest birth rate in the world. Its working age population is expected to decline by more than any other territory in the next 30 years, analysts said, "which would erode the productive potential of the economy".

Japan’s Nikkei 225 fell 0.64% despite a weak yen following last week's comments from Bank of Japan governor Kuroda that he did not intend to influence the exchange rate.

In company news, Honda Motor lost 1.15%. The automobile company decided to discontinue its hybrid Civic and Accord sedans to focus on new technologies.

Elsewhere in Australia, the ASX index finished flat, down by just 0.05%, following the release of Reserve Bank of Australia's minutes. The central bank kept interest rates steady at 2%.

The minutes showed the RBA is confident growth that China has improved, and that the Fed is likely to raise interest rates this year.

In economic data published by the Australian Bureau of Statistics, new motor vehicle sales rose by 0.8% year-on-year in May, lower than 2.6% same time last year. On a montly basis, sales declined 1.3%, better than the 1.5% fall in April.