Asian shares lower after weaker US growth data
HONG KONG—Asian markets fell Wednesday, following the lead from Wall Street after revised US growth figures showed the world’s number one economy expanded slower than previously thought in the third quarter.
Concerns over the eurozone debt crisis also continued to drag on sentiment, despite the International Monetary Fund (IMF) announcing the expansion of a credit line aimed at helping some countries protect themselves from contagion.
Sydney shed 1.98 percent, or 82 points, to end at 4,051.0 while Seoul dived 2.36 percent, or 43.19 points, to 1,783.10.
Adding to the downbeat mood were preliminary figures out of Beijing showing manufacturing activity in China had slumped to its lowest level in 32 months.
Hong Kong tumbled 2.12 percent, or 387.16 points, to 17,864.43 and Shanghai fell 0.73 percent, or 17.56 points, to 2,395.07.
Tokyo was closed for a public holiday.
“Liquidity remains an issue across many markets and many countries, as volatile markets and uncertain macro-economic conditions mean that investors are once again happy to remain on the sidelines,” said Jason Hughes, head of premium client management at IG Markets.
In Washington the Commerce Department said Tuesday that the US economy grew 2.0 percent in the July-September quarter, slower than the 2.5 percent estimated a month ago. Many economists had expected the revision to be unchanged.
The softer growth rate was underpinned by a contraction in overall business investment, which shrank at an annual pace of 0.1 percent, due to an inventory rundown.
The Dow fell 0.46 percent, the Nasdaq slipped 0.07 percent and the S&P 500 lost 0.41 percent.
The weaker data add to the already bearish feeling across global markets as debt troubles in the United States and Europe lead traders to move their money out of riskier assets.
In Europe, where Italy and Spain are in danger of following Greece into crisis, there are fears that France’s exposure to weaker economies’ sovereign debt could see it lose its top-notch AAA credit rating.
The IMF on Tuesday said it would widen a credit mechanism set up to help countries with “relatively strong policies and fundamentals” but whose economies are endangered “during periods of heightened economic or market stress.”
It could help Italy and Spain, which have seen yields on their 10-year bonds sit dangerously close to the seven percent level that is considered unsustainable.
In early European trade the euro was at $1.3450 from $1.3505 late Tuesday in New York and it fetched 103.63 yen from 103.96. The dollar was at 77.04 yen from 76.98 yen.
Banking giant HSBC said Wednesday that its purchasing managers’ index (PMI) for China dropped to 48 in November compared with 51 the previous month, its sharpest drop since March 2009, caused by weak demand from the US and Europe.
A reading above 50 indicates the sector is expanding, while a reading below 50 suggests a contraction. The final figures are due to be released next week.
On oil markets, New York’s main contract, light sweet crude for delivery in January, fell $1.08 to $96.93 a barrel in the afternoon.
Brent North Sea crude for January delivery shed 91 cents to $108.12.
Gold was trading at $1,695.15 an ounce by 0950 GMT, from $1,691.60 late Tuesday.
In other markets:
— Singapore fell 1.50 percent, or 40.63 points, to end at 2,656.57.
Fraser and Neave gained 0.97 percent to Sg$6.23 while DBS Group fell 1.71 percent to Sg$12.09.
— Taipei tumbled 2.77 percent, or 193.60 points, to 6,806.43.
HTC fell 5.83 percent to Tw$565.0 while Taiwan Semiconductor Manufacturing Co was 0.81 percent lower at Tw$73.4.
— Manila closed 0.42 percent, or 18.16 points, lower at 4,271.59.
Metro Pacific Investments fell 2.2 percent to 3.49 pesos and port operator ICTSI slid 0.5 percent to 57.90 pesos but San Miguel rose 0.2 percent to 127.70 pesos and Philippine Long Distance Telephone advanced 0.1 percent to 2,348 pesos.
— Kuala Lumpur closed 0.34 percent, or 4.82 points, lower at 1,433.17.
Utility company Tenaga Nasional fell 3.1 percent to 5.37 ringgit, while financial firm CIMB Group Holdings lost 1.2 percent to 6.68 ringgit. Shipping company MISC rose 2.1 percent to 6.20 ringgit.
— Jakarta was 1.30 percent, or 48.52 points, off at 3,687.01.
— Wellington rose 0.50 percent, or 16.40 points, to 3,268.67.
Telecom lifted 4.5 percent to NZ$2.03, Fletcher Building was down 0.2 percent at NZ$5.92 and Air New Zealand slipped 2.0 percent to NZ$2.005.
— Bangkok ended flat, dipping 0.49 points to 976.87.
— Mumbai plunged 586.73 points, or 3.65 percent, to 15,478.69, its lowest level since Nov. 3, 2009.—Dow Jones Newswires contributed to this story
