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By Bloomberg

Asian stocks were dragged lower by Australian banks after Australia & New Zealand Banking Group Ltd. said it’s raising capital. Chinese shares fell amid concern government intervention will fail to stop more declines.

Commonwealth Bank of Australia and Westpac Banking Corp. slumped at least 3 percent after ANZ said it’s seeking to procure A$3 billion ($2.2 billion) amid moves by regulators to make Australian banks safer. The Shanghai Composite Index slid 0.9 percent on low trading volumes. Japan’s Topix index climbed 0.5 percent as investors weighed company earnings and after the yen weakened against the dollar amid better-than-estimated U.S. economic data.

The MSCI Asia Pacific Index slid 0.2 percent to 140.76 as of 4:01 p.m. in Hong Kong. Australian financial shares were the biggest drag on the regional gauge. The country’s largest lenders have already announced about A$8 billion of capital raisings this year, the most in any year since 2008, data compiled by Bloomberg show.

“The financial sector is in the red on the back of the big news this morning from ANZ,” said Tristan K’Nell, head of trading at Quay Equities in Sydney. “The market now awaits what CBA and Westpac will do in light of the fact they will now have to play catch up.”

Australia’s S&P/ASX 200 Index sank 1.1 percent. South Korea’s Kospi index retreated 0.8 percent. Singapore’s Straits Times Index fell o.1 percent and New Zealand’s NZX 50 Index dropped 0.2 percent.

Hong Kong’s Hang Seng Index lost 0.6 percent and the Hang Seng China Enterprises Index, which tracks mainland shares listed in the city, slid 0.3 percent.

China’s Plunge

The Shanghai Composite has fallen 29 percent since its June 12 peak as traders bet valuations were unsustainably high. The government has spent as much as 900 billion yuan ($145 billion) in the past two months to prop up the nation’s stock prices, according to Goldman Sachs Group Inc. China will release economic data for July this weekend, with exports estimated to have fallen 1.5 percent in a Bloomberg survey.

Japan’s Topix index rose after three days of declines sent the yen to a two-month low. The currency last traded at 124.90 per dollar. Nippon Telegraph & Telephone Corp. rose 3.2 percent after saying it will buy back as much as 100 billion yen ($804 million) of shares.

E-mini futures on the Standard & Poor’s 500 Index were little changed. The underlying measure rose 0.3 percent on Wednesday in New York.

Bets on Fed

Traders are bolstering bets the Federal Reserve will raise interest rates before the year is out as the economy appears firmly in recovery mode. Interest-rate futures showed the chances of a Federal Reserve rate increase next month reached 50 percent on Wednesday, up from 38 percent earlier this week.

“A September rate hike from the Federal Reserve seems to be the consensus among market participants,” said Chris Weston, Melbourne-based chief market strategist at IG Ltd. This “is the first time the market has swung to having September as its base case. It is now clear the Fed’s tolerance of low wages has increased and we’re not going to need to see a dramatic improvement in wage trends before raising the funds rate. This makes the unemployment rate data print the most important aspect in this Friday’s payrolls.”