Asian stocks down after weak US data, Tokyo hit by strong yen
HONG KONG–Most Asian stock markets sank Thursday after US growth data fell well short of forecasts, with the dollar around two-month lows against the euro as the chances of an interest rate hike in early summer faded.
The single currency was also supported by hopes Greece will reach a bailout reform deal with its creditors.
Tokyo tumbled 2.69 percent, or 538.94 points, to 19,520.01 as exporters were hit by the stronger yen, while Shanghai fell 0.78 percent, or 34.97 points, to 4,441.65.
Hong Kong shed 0.94 percent, or 267.34 points, to 28,133.00
Sydney slipped 0.83 percent, or 48.6 points, to close at 5,790–its third-straight day of declines–while Seoul fell 0.72 percent, or 15.46 points, to end at 2,127.17.
The Commerce Department said Wednesday that the US economy grew at an annualized rate of 0.2 percent in January-February, far short of the 1 percent projected by analysts. The result is the latest indicating weakness in the world’s No. 1 economy.
Later in the day the US Federal Reserve said the slowdown was due “in part” to transitory factors and expansion should continue at a “moderate pace.”
That suggested the Fed still expects to begin a slow series of rate rises in the coming months, though not likely in June as many analysts had been expecting until recently.
“The jury is still out on whether the weakness points to a more structural slowdown in the economy,” Mark Lister, head of private wealth research at Craigs Investment Partners, told Bloomberg News.
“While plenty of people are expecting the rate hike to be pushed back even to 2016, it’s important to watch the next piece of economic news to gauge whether the weakness we’ve seen was a one-off or the beginning of a trend.”
The news pushed Wall Street’s main indexes lower. The Dow shed 0.41 percent, the S&P 500 dropped 0.37 percent and the Nasdaq fell 0.63 percent.
Greece hopes
The dollar also came under further pressure as the likelihood of a rate hike, which tends to lift the currency, slimmed.
The greenback was at 118.80 yen Thursday, slipping from 119.02 yen in New York.
A decision by the Bank of Japan to stand pat on monetary policy also provided yen support.
Traders remained upbeat on the euro with Greece prepared to hand its creditors a series of reform measures as it looks to unblock much-needed cash to service its debts and avert a default that would likely see it crash out of the eurozone.
At one point the euro bought $1.1122 but eased to sit at $1.1103 in the afternoon. It was also at 132.31 yen Thursday. While that compares with $1.1128 –a level not seen since March 3–and 132.45 yen in New York, it is still sharply up from $1.0998 and 130.90 yen earlier Wednesday in Asia.
Dealers seemed unaffected by a decision by Moody’s to downgrade Greece’s debt further into junk territory, citing “high uncertainty” Athens can reach an agreement.
On oil markets US benchmark West Texas Intermediate for June was up 62 cents at $59.20 in afternoon trade, while Brent for June rose 37 cents to $66.21 a barrel.
Gold fetched $1,202.84 against $1,208.05 late Wednesday.
In other markets:
— Mumbai fell 0.79 percent, or 214.62 points, to end at 27,011.31.
Housing Development Finance Corporation fell 2.70 percent to 1,169.40 rupees, while Axis Bank rose 2.70 percent to 567.85 rupees.
— Bangkok closed up 0.28 percent, or 4.27 points, to 1,526.74.
Supermarket operator Big C Supercenter lost 2.20 percent to 222 baht, while Bangkok Bank added 1.09 percent to 185 baht.
— Kuala Lumpur’s main index slipped 1.34 percent, or 24.66 points, to close at 1,818.27.
Cycle & Carriage Bintang gained 1.32 percent to close at 2.30 ringgit while Public Bank ended 1.12 percent lower at 19.48 ringgit. Telekom Malaysia fell 0.80 percent to 7.41 ringgit.
— Jakarta ended down 0.38 percent, or 19.14 points, at 5,086.43.
Retailer Hero Supermarket gained 4.44 percent to 1,880 rupiah, while auto maker Astra International slipped 3.52 percent to 6,850 rupiah.
— Singapore rose 0.01 percent, or 0.24 points, to 3,487.39.
Oversea-Chinese Banking Corporation declined 1.84 percent to Sg$10.68 while Singapore Telecom fell 0.23 percent to Sg$4.43.
— Taipei fell 0.34 percent, or 33.78 points, to 9,820.05.
Taiwan Semiconductor Manufacturing Co. shed 1.01 percent to Tw$147.0 while Hon Hai was 0.11 percent lower at Tw$92.0.
— Wellington rose 0.88 percent, or 50.52 points, to 5,791.34.
Fletcher Building was up 1.22 percent at NZ$8.31 and Trade Me gained 0.26 percent to NZ$3.82.
— Manila sank 1.41 percent, or 110.65 points, to 7,714.82.
Banco de Oro was 0.91 percent lower at 109 pesos while Philippine Long Distance Telephone fell 3.12 percent to 2,798 pesos but Metrobank closed 0.54 percent higher at 93.50 pesos.
