Asian stocks down after Wall Street drifts
HONG KONG—Asian stocks fell on Wednesday after an uninspiring overnight performance from Wall Street and a muted response to news that Portugal had agreed a multibillion-dollar bailout deal.
Sydney fell 0.93 percent, or 44.5 points, to 4,740.1 and Seoul ended the day 0.91 percent, or 20.07 points, off at 2,180.66.
Hong Kong plunged 1.35 percent, or 318.01 points, to close at 23,315.24 while Shanghai shed 2.26 percent, or 66.17 points, to 2,866.02 as investors continued to fret about possible new monetary tightening measures.
Tokyo was closed for a national holiday.
“The market environment remains one of rising risk aversion, with commodities facing the brunt of pressure,” Credit Agricole said in a note to clients.
“News that Portugal has finally reached an agreement with the European Union/International Monetary Fund over a bailout for the country has been greeted with a muted response so far,” it said, according to Dow Jones Newswires.
Portugal’s government announced Tuesday it had inked a 78 billion euro ($116 billion) deal with the European Central Bank, European Union and International Monetary Fund after a two-week negotiation.
The plan calls for the loosening of deficit reduction targets for Portugal, whose economy is expected to shrink this year as it implements austerity measures.
Lisbon was forced to go cap in hand to the troika last month after its government resigned when the rejection of a fourth round of austerity measures sent borrowing costs rocketing.
Portugal has to have the bailout package in place by June 15 when it has to repay nearly 5.0 billion euros ($7.3 billion) in maturing debt.
Australia’s headline stock index is at a multi-week low, dragged down by the energy and materials sectors after recent commodity price declines.
“I think we hit the top of the (S&P/ASX 200’s) range near 5,000 and it’s been too easy for offshore investors to take profits with the (Australian) currency having spiked up to $1.1010,” said BBY senior institutional trader Peter Copeland.
The Dow Jones Industrial Average ended Tuesday virtually unchanged at 12,087.51, but the broader S&P 500 index shed 4.60 points (0.34 percent) to 1,356.62, while the tech-rich Nasdaq Composite fell 20.22 points (0.71 percent) to 2,841.62.
US stock markets were following others down – the dollar, oil, gold and silver all tumbled.
On currency markets in early European trade the euro changed hands at $1.4867 from $1.4823 in New York on Tuesday. Against the Japanese yen, the European currency bought 120.37 yen from 120.02, and the greenback was flat at 80.98.
Analysts said the European Central Bank was expected to keep its key interest rate at 1.25 percent when it meets on Thursday, although it might signal a further increase amid climbing prices in the 17-nation eurozone.
Gold continued to drop, closing in Hong Kong at $1,536-$1,537 an ounce, down from Tuesday’s close of $1,542.50-$1,543.50.
Oil prices fell on slumping US demand, as data predicted a 3.2 million barrel gain in crude inventories, larger than analysts’ forecasts.
New York’s main contract, light sweet crude for delivery in June, shed 35 cents to $110.70 a barrel.
Brent North Sea crude for June delivery turned higher to gain five cents to $122.50.
In other markets:
— Singapore closed 1.26 percent, or 39.81 points, lower at 3,113.76.
SingTel lost 0.96 percent to Sg$3.09 and Oversea-Chinese Banking Corp dipped 1.60 percent to Sg$9.23.
— Taipei was flat, adding 1.27 points to 8,947.35.
Taiwan Semiconductor Manufacturing Co was off 1.07 percent at Tw$73.8 while Formosa Plastics Corp lost 2.16 percent at Tw$113.5.
— Manila fell 0.49 percent, or 21.16 points, to 4,298.21.
Energy Development dropped 0.3 percent to 6.94 pesos, Semirara Mining was off 2.7 percent at 215 pesos and DMCI Holdings gave up 0.1 percent to 44.80 pesos.
— Wellington closed flat, edging up 0.08 points to 3,595.19.
Australia and New Zealand Bank fell 2.2 percent to NZ$31.81, Westpac shed 2.4 percent to NZ$32.55 and Contact Energy was down 0.8 percent to NZ$5.98, while Fletcher Building rose 0.7 percent to NZ$9.11.
Telecom added 1.9 percent to NZ$2.17 and Air New Zealand gained 0.9 percent to NZ$1.13.
— Jakarta was flat, edging up 1.06 points to 3,814.92.
— Kuala Lumpur slipped 0.20 percent, or 3.04 points, to 1,528.43.
Hong Leong Bank was down 1.2 percent at 10.30 ringgit, Gamuda fell 1.1 percent to 3.65 and gaming giant Genting dropped 1.1 percent to 11.30.
Malaysian Airline added 1.1 percent to 1.82.
— Bangkok edged up 0.33 percent, or 3.54 points, to 1,073.97.
Banpu lost 4 baht to 726, while Siam Cement added 1 baht to 370.
— Mumbai closed down 0.35 percent, or 65.33 points, at 18,469.36.
The index has fallen for eight straight days on concerns of slower economic growth.
The Reserve Bank of India on Tuesday hiked interest rates by a bigger-than-expected 50 basis points, its ninth move in 15 months.
It also cut its economic growth forecast to eight percent for this fiscal year, from an earlier projection of 8.5 percent.
Motorcycle maker Bajaj Auto fell 4.82 percent to 1,301.1 rupees while rival Hero Honda slid 3.63 percent to 1,600.1.
State-run fuel retailer Bharat Petroleum Corp rose 4.05 percent to 654.3 on media reports that concerned ministries will meet next week to decide on a fuel price hike. Jet Airways fell 4.7 percent to 447.3.
