Asian markets hit by IMF growth revision

A man walks in front of the electronic stock board of a securities firm showing Japan’s Nikkei 225 index falling 173.36 points to 8596.23 in Tokyo, Wednesday, Oct. 10, 2012. Asian markets mostly fell Wednesday as investors reacted to losses on Wall Street after the IMF cut its global growth forecast, predicting the slowest rate in three years. AP PHOTO/ITSUO INOUYE

HONG KONG—Asian markets mostly fell Wednesday as investors reacted to losses on Wall Street after the IMF cut its global growth forecast, predicting the slowest rate in three years.

Japanese shares were also hit by the strong yen, with selling stoked by news the country’s top carmakers saw sales in China slump in September owing to a diplomatic spat between Tokyo and Beijing.

Tokyo tumbled 1.98 percent, or 173.36 points, to 8,596.23 – its lowest since August 3. Sydney lost 0.32 percent, or 14.6 points, to close at 4,490.7 and Seoul was off 1.56 percent, or 30.82 points, at 1,948.22.

Hong Kong ended flat, edging down 17.68 points to 20,919.60, but Shanghai rose 0.22 percent, or 4.71 points, to 2,119.94.

The International Monetary Fund on Tuesday further cut its growth estimates for the world economy this year and next, citing the ongoing European debt crisis and stuttering US growth.

The latest Global World Outlook, which noted that Asia was being hit by a slowdown in China, also warned that conditions could worsen if the eurozone problems were not dealt with.

It followed a similar downward revision for Asia’s growth by the World Bank and the Asian Development Bank.

“Markets have gone a bit too far and people are starting to get worried about the growth outlook,” said Matthew Sherwood, head of investment market research at Perpetual in Sydney.

On Wall Street the Dow lost 0.81 percent, the S&P 500 slid 0.99 percent and the Nasdaq shed 1.52 percent, with sentiment also depressed by concerns over the upcoming corporate earnings season.

Global markets have enjoyed strong gains recently after the US, Japanese and European central banks unveiled monetary easing schemes to kickstart lending and jobs.

Japanese shares were hit again as the IMF report led dealers to buy the safe-haven yen.

“Japan got its first ‘IMF shock’ Tuesday, but the fallout in the US market will serve as a double-whammy,” said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities.

“Combined with the rise in the yen, stocks will be in full retreat,” Nishi told Dow Jones Newswires.

On currency markets the euro slipped to $1.2850 and 100.66 yen in early European trade from $1.2881 and 100.77 yen in New York late Tuesday. The dollar was at 78.30 yen from 78.23 yen.

Car giants Toyota, Nissan and Honda were hit by a dive in Chinese car sales as an islands row between China and Japan continues.

Toyota saw monthly sales in China, the world’s biggest car market, slump 48.9 percent year on year last month, while Nissan sales there tumbled 35.3 percent and Honda dropped 40.5 percent.

On Tokyo’s Nikkei index, Toyota Motor ended down 1.9 percent, with news also emerging that it had recalled more than seven million cars over a fire risk from its electric windows.

Honda Motor lost 1.1 percent but Nissan Motor added 1.2 percent.

Oil prices were lower. New York’s main contract, light sweet crude for delivery in November, fell 42 cents to $91.97 a barrel in the afternoon and Brent North Sea crude for November delivery shed seven cents to $114.43.

Gold was at $1,762.50 at 1050 GMT compared with $1,772.30 on Wednesday.

In other markets:

— Singapore closed down 1.05 percent, or 32.10 points, at 3,033.81.

Wilmar International fell 1.60 percent to Sg$3.07 and Keppel Corp. shed 1.41 percent to Sg$11.18.

— Wellington lost 0.51 percent, or 19.85 points, to 3,888.14.

Fletcher Building dipped 1.92 percent to NZ$7.16 and Chorus slipped 1.19 percent to NZ$3.32.

— Manila closed 0.47 percent lower, shedding 25.30 points to 5,369.60.

Philippine Long Distance Telephone lost 0.22 percent to 2,724 pesos and Ayala Corp. fell 1.38 percent to 430 pesos.

— Jakarta was flat, nudging down 0.24 points to 4,280.01.

Bank Rakyat fell 1.3 percent to 7,600 rupiah, Bank Negara lost 1.3 percent to 3,825 rupiah, and cigarette maker Gudang Garam rose 3.4 percent to 51,600 rupiah.

— Kuala Lumpur was 0.24 percent, or 3.92 points, off at 1,659.40.

Axiata Group lost 0.3 percent to 6.71 ringgit, while Sime Darby shed 0.6 percent to 9.72 ringgit. YTL added 0.6 percent to 1.76 ringgit.

— Bangkok fell 0.24 percent, or 3.13 points, to 1,289.35.

— Mumbai slid 0.86 percent, or 162.26 points, to 18,631.1.

State Bank of India fell 2.46 percent to 2,224 rupees, Kingfisher Airlines fell 4.58 percent to 11.45 rupees.

— Taipei was closed for a public holiday.