Asian stocks tumble after Wall Street sell-off

HONG KONG – Asian stock markets tumbled Thursday after a sell-off on Wall Street caused by heavy falls in commodities and as lingering concerns over European debt boosted the dollar.

Resource plays were hit after oil prices fell in New York because of a rally on the dollar and data suggesting demand was slowing in the United States and China, the world’s biggest energy users.

Hong Kong fell 0.83 percent by the break, Shanghai lost 0.36 percent, Tokyo fell 0.70 percent in the afternoon, Sydney was down 1.20 percent and Seoul shed 1.26 percent.

The losses followed steep falls on Wednesday on Wall Street, where shares in big oil companies were sold following a 5.5 percent drop in crude prices.

The Dow tumbled 1.02 percent, the S&P 500 index lost 1.11 percent and tech-heavy Nasdaq Composite fell 0.93 percent.

Traders moved out of black gold after the US Department of Energy’s latest weekly report on reserves showed another increase in crude stockpiles and an unexpected rise in gasoline reserves.

Adding to the US sell-off was a rare, short-lived halt in trading of oil and oil products’ futures on the New York Mercantile Exchange after gasoline prices hit their daily low limit.

However, prices rebounded on bargain hunting in early Asian trade Thursday.

New York’s main contract, light sweet crude for delivery in June, rose 88 cents to $99.09 a barrel in morning trade, while Brent North Sea crude for June delivery gained 93 cents to $113.50.

Sentiment had already been harmed after China said consumer prices in April rose 5.3 percent, a little lower than March’s 5.4 percent but much higher than the government’s target of four percent – raising fears of a fresh set of monetary tightening in the world’s number two economy.

Gold was also a victim of the asset sell-off as it opened at $1,503.50-$1,504.50 an ounce in Hong Kong, well down from Wednesday’s finish of $1,523.30-$1,524.30.

A stronger dollar also made commodity prices less attractive as the greenback rose against the euro amid eurozone fears as Greece continues to struggle under mountains of debt.

Police in Athens clashed with protesters near parliament as thousands demonstrated against a new wave of austerity cuts designed to keep the country’s economy afloat.

Despite a 110-billion-euro bailout last year the country’s overall debt has ballooned leading to speculation it may need alternative options to keep up with repayments on the original loan.

The dollar was at 81.14 yen in Tokyo morning trade, compared with 81.02 yen late Wednesday in New York, where it had jumped from 80.83.

The euro edged up to $1.4226 from 1.4193 in New York but well down from $1.4410 on Tuesday.

The European unit was at 115.47 yen from 116.49 yen.

“The US dollar is strong due to the commodity rout and the euro is coming under increasing pressure because of the Greek situation, and it’s hard to see the positions reversing any time soon,” Western Union Business Solutions corporate dealing manager Chris Hunter in Auckland told Dow Jones Newswires.