Asian shares fall on US stimulus jitters

A man, wiping the sweat from his forehead, looks at an electronic stock board of a securities firm indicating a sharp drop of 576.12 points, or 4 percent, to 13,824.94 of Japan’s Nikkei 225 index in Tokyo Wednesday, Aug. 7, 2013. Asian stock markets fell Wednesday, led by a tumble in Tokyo’s benchmark, as expectations mounted that the US central bank will begin to phase out its monetary stimulus next month. AP PHOTO/ITSUO INOUYE

HONG KONG—Asian markets fell on Wednesday, with Tokyo leading regional declines with a four percent plunge after comments from Federal Reserve officials sparked jitters over a likely pullback of the US stimulus.

Tokyo tumbled 576.12 points to 13,824.94, the biggest drop since mid-June, as the dollar fell sharply against the yen.

Sydney dropped 1.85 percent, or 94.3 points, to 5,011.3; Seoul fell 1.48 percent, or 28.29 points, to 1,878.33, and Hong Kong lost 1.53 percent, or 334.86 points, to 21,588.84. Shanghai slipped 0.67 percent, or 13.72 points, to 2,046.78.

US stocks, which hit new records last week, lost ground for a second day Tuesday following indications that the Federal Reserve will begin tapering off its $85 billion a month quantitative easing programme.

The Dow Jones Industrial Average lost 0.60 percent, or 93.39 points, to 15,518.74, its biggest point and percentage loss since June.

US trade numbers from the Commerce Department showed a narrowing trade deficit in June, which analysts said points to a likely upward revision to the growth estimate for the quarter, and firm growth in the current quarter.

The chiefs of the Federal Reserve’s Chicago and Atlanta branches both said that the central bank could begin tapering the stimulus program in September, but stressed that economic growth needed to hold steady or improve.

The comments could be an attempt by the Fed to prepare financial markets for a possible rollback of stimulus and ensure that valuations are not inflated, said Matthew Sherwood, head of investment market research at Perpetual Investments in Sydney.

“If they do it next month, the wind-back is going to be modest,” Sherwood told Dow Jones Newswires, adding that the tapering is more likely to happen in 2014.

The growing speculation also sent the dollar sharply lower against the yen.

The greenback was changing hands at 97.10 yen in Asian afternoon trade against 97.76 yen in New York Tuesday afternoon.

The euro bought $1.3302, nearly flat from New York, but falling to 129.44 yen from 130.10 yen.

On oil markets New York’s main contract, West Texas Intermediate for delivery in September, was up two cents at $105.32 a barrel in afternoon Asian trade. Brent North Sea crude for September shed 29 cents to $107.89.

Gold cost $1,277.43 at 1050 GMT compared with $1,293.40 late Tuesday.

In other markets:

— Bangkok edged up 0.04 percent, or 0.60 points, to 1,429.99.

Coal producer Banpu fell 1.29 percent to 230 baht, while Bangkok Bank gained 0.50 percent to 201 baht.

— Taipei fell 1.46 percent, or 117.62 points, to 7,921.29. HTC rose 1.01 percent to Tw$150.0 while TSMC lost 1.82 percent to Tw$97.0.

— Wellington slipped 0.59 percent, or 27.20 points, to 4,548.30.

Telecom Corp. was off 2.16 percent at NZ$2.26, Fletcher Building eased 0.59 percent to NZ$8.37 while Air New Zealand was unchanged at NZ$1.42.

— Manila was unchanged at 6,420.79.

Philippine Long Distance Telephone Co. rose 0.13 percent to 3,084 pesos and Ayala Corp. added 0.51 percent to 595 pesos.

— Kuala Lumpur was down 0.30 percent, or 5.32 points, at 1,779.32 in half-day trading.

Bumi Armada ended 3.0 percent lower at 3.87 ringgit while Petronas Dagangan gained 2.5 percent to 28.00 ringgit.

— Mumbai slid 0.36 percent, or 68.16 points, to 18,664.88.

Tata Motors fell 2.96 percent to 278.85 rupees, while Pharma firm Wockhardt fell 5.00 percent to 362.25 rupees.

— Singapore climbed 0.16 percent, or 5.02 points, to 3,229.91.

United Overseas Bank gained 0.28 percent to Sg$21.75 while agribusiness company Wilmar International rose 0.32 percent to Sg$3.16.

— Jakarta was closed for a public holiday.—Anuj Chopra