By Chao Deng

Central bank's largest single-day injection in almost 19 months

China led Asian markets lower Tuesday, shrugging off signals of recovery in its housing market and the central bank's fresh steps to offset outflows in the wake of a weaker currency.

Shanghai Composite Index tumbled 6.2% to 3,748.16, while the smaller Shenzhen Composite Index fell 6.6% to 2,174.42.

In Hong Kong , shares are down 1%, and a gauge of Chinese companies listed in the city fell 1.8%.

The losses in Shanghai started building earlier in the morning among stocks of state-owned enterprises.

"At 2 p.m. it started to turn south again at a very fast rate," said Steve Wang, a research director at Reorient Group. "People questioned why the government hadn't yet stepped in" at a time of the day that it usually would, he added.

The heavy selling in the final minutes of trading echoes trading sessions in recent weeks, when faltering assurances of China's role in the market accelerated losses.

Neither measures to calm worries of capital flight given a weaker yuan nor positive economic data satiated investors.

Earlier Tuesday, China's central bank injected the largest amount of cash into the financial system on a single-day basis in almost 19 months (http://www.marketwatch.com/story/pboc-injection-shows-china-worries-about-outflows-2015-08-18-2485750), signaling Beijing's growing concerns about capital outflows after the yuan's recent weakening.

In a routine money-market operation Tuesday, the People's Bank of China offered 120 billion yuan ($18.77 billion) worth of seven-day reverse repurchase agreements, or reverse repos, which are a short-term loans to commercial lenders in the money market.

Investors also looked past brighter housing data, which has been a rare bright spot after a stock-market rout and period of currency volatility. Some say a sanguine reading could diminish hopes for stimulus.

"The figures roughly indicate a continuation of the existing trend but they do not appear to be poor enough to require some policy intervention," said Gerry Alfonso, director of trading at Shenwan Hongyuan Securities in Shanghai.

On Tuesday, the average price of new homes in 70 Chinese cities rose for a third-straight month in July, up 0.15%, on a monthly basis. That compares with a rise of 0.16% in June.

While some analysts have said a rocky stock market, down nearly a quarter from its June peak, would encourage investors to put their money back into real estate, they caution that a prolonged rout could end up hurting the economy. The gauge continues to show that first- and second-tier cities are outpacing smaller ones -- with a 23.6% rebound in July from a year earlier in Shenzhen -- though positive momentum is starting to spill into other cities.

Elsewhere, South Korea's Kospi was down 0.6%, Japan's Nikkei Stock Average fell 0.3% and Australia's SP ASX 200 is down 1.2%.

Meanwhile, the yuan has stabilized after China devalued the currency by nearly 2% last week. On Tuesday, China's central bank set the yuan's trading midpoint nearly flat with the level a day earlier, at 6.3966 per U.S. dollar. The currency can trade within a 2% band above or below that. The yuan was last down 0.1% at 6.40 against the U.S. dollar.

Minutes from the Reserve Bank of Australia show that the central bank sees a silver lining in the decline of its currency, which was recently hurt by China's yuan devaluation. A cheaper currency could help make Australia's commodity exports more competitive.

The Australian dollar was down 0.2% at $0.7350.

Renewed worries over China's slowing economy and the impact that will have on emerging markets pushed the Thai baht to a fresh six-year low and the Indonesia rupiah to a fresh 17-year low, each against the U.S. dollar.

The Thai baht was down 0.2% at 35.55 against the dollar, while the Indonesian rupiah was down 0.4% at 13,840 against the U.S. currency.

Brent crude oil was down 0.6% at $48.45 in Asia trade, putting it down about 6% so far this month.

U.S. oil prices fell to a fresh six-year low overnight, on concerns that the crude-oil glut is set to grow. It is down 11% this month as concerns mount that persistently high crude-oil production from the U.S. and the Organization of the Petroleum Exporting Countries would keep the global market oversupplied through 2015.

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(END) Dow Jones Newswires

August 18, 2015 03:48 ET (07:48 GMT)