Asian stocks slump after heavy Wall Street losses
HONG KONG—Asian shares tumbled on Thursday, following heavy losses on Wall Street after another batch of weak data stoked concerns over the state of the global economy.
Tokyo was also weighed by political uncertainty as Prime Minister Naoto Kan faced a vote of no-confidence, adding to investors’ nervousness about the already struggling economy.
Tokyo slumped 1.69 percent, or 164.04 points, to 9,555.04, Seoul sank 1.27 percent, or 27.14 points, to 2,114.20 and Sydney dived 2.27 percent, or 106.9 points, to 4,600.4.
Hong Kong lost 1.58 percent, or 372.59 points, to 23,253.84 and Shanghai shed 1.40 percent, or 38.39 points, to 2,705.18.
Regional stocks were given a bad start when the Dow suffered its worst performance in several months, diving 2.22 percent on Wednesday while the broader S&P 500 fell 2.28 percent and the tech-rich Nasdaq lost 2.33 percent.
Traders in the United States went into a sell-off as they digested a slew of miserable data suggesting the world’s No.1 economy is stalling.
Payrolls firm ADP said the private sector added 38,000 jobs in May, well below the 170,000 expected and raising concerns that key government payroll figures out on Friday will also be worse than hoped.
The Institute of Supply Management’s manufacturing survey plummeted nearly seven percentage points from April to a 19-month low.
Adding to dealers’ woes, US auto sales in May fell 8.3 percent from April and 3.7 percent year on year, according to the research firm Autodata.
The market was not helped when, late in the session, Moody’s rating agency again downgraded Greek debt and gave it a negative outlook, raising the already high stakes in rescue negotiations for the imperiled eurozone member.
On Wednesday manufacturing data across Asia pointed to an easing in the region’s leading emerging economies, with the purchasing managers’ indexes in China, India, South Korea and Taiwan showing slower growth.
“The US data were atrocious, China still seems on course to raise rates in June, Moody’s cut its rating on Greece, and Japan’s politics is in a shambles – so we have all the selling factors lined up today,” Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, told Dow Jones Newswires.
In Japan, embattled Prime Minister Kan survived a no-confidence vote – announced after the market closed – but concerns over his leadership continue to dog Asia’s No. 2 economy, which is mired in debt and deflation.
Before the poll, which was called by the conservative opposition over his handling of the March 11 quake and atomic crisis, he vowed to step aside once he had overseen the country’s recovery disasters.
The dollar rose to 80.97 yen in early Tokyo trade, from 80.91 yen late New York Wednesday while the euro edged up to $1.4375 from 1.4331.
The single European unit was at 116.44 yen, up from 115.99.
Oil was down. New York’s main contract, light sweet crude for July delivery, lost 57 cents to $99.72 a barrel and Brent North Sea crude for July delivery dipped 31 cents to $114.22 in the afternoon.
Gold closed at $1,540-$1,541 per ounce, up from its Wednesday close of $1,530.50-$1,531.50.
In other markets:
— Taipei fell 70.99 points, or 0.78 percent, to 8,991.36.
Top foodstuff producer Uni-President Enterprise was 1.20 percent lower at Tw$41 amid concerns that the food sector would be hit hard in the wake of the island’s worst tainted drink scare in years. Smartphone maker HTC lost 3.21 percent to Tw$1,205.
— Manila gained 0.90 percent, or 37.82 points, to 4,324.98.
San Miguel gained 0.3 percent to 114.30 pesos, Manila Electric added 7.2 percent to 268.80 pesos and port operator ICTSI climbed 1.2 percent to 53 pesos. Philippine Long Distance Telephone fell 1.2 percent to 2,376 pesos.
— Wellington closed down 0.73 percent, or 25.72 points, at 3,551.54.
Fletcher Building slipped 1 percent to NZ$8.84, Telecom fell 1.6 percent to NZ$2.395 and Contact Energy ended 1.5 percent lower at NZ$5.81.
— Singapore closed down 12.27 points, or 0.39 percent, at 3,160.6.
Keppel Corp lost 0.52 percent to Sg$11.38 and Oversea-Chinese Banking Corp was 0.53 percent lower at Sg$9.44.
— Kuala Lumpur ended up 0.10 percent, or 1.62 points, to close at 1,558.04.
Gaming giant Genting climbed 1.3 perent at 11.10 ringgit while cement maker Lafarge rose 1.8 percent at 7.49. National power firm TNB slid 1.5 percent to 6.99 ringgit.
— Bangkok edged down 0.55 percent, or 5.82 points, to 1,059.81.
Banpu lost 6 baht to 734, while PTT fell 3 baht to 347.
— Mumbai fell 0.62 percent, or 114.63 points, to 18,494.18.
Shares in Sun TV Network plunged 27.9 percent, or 105.3 rupees, to 272.1 and budget airline SpiceJet fell 16.06 percent, or 6.6 rupees, to 34.5.
— Jakarta was closed for a public holiday.
