Asian Stocks Decline on Wall Street Drop
Asian stock markets were weaker on Monday, after Wall Street fell further on worries about U.S. President Barack Obama’s proposal to curb banks’ risk-taking.
Japan’s Nikkei Average lost 1.2 percent, with tech shares such as Tokyo Electron falling after disappointing Google results, while resource shares were hurt by weak commodity prices.
But Canon inched up 0.3 percent after the Nikkei business daily reported the company’s operating profit appears to have topped initial forecasts, due to robust camera demand.
Tokyo Electron, the world’s second-largest maker of chip-producing equipment, lost 1.9 percent to 5,620 yen despite saying on Friday it would resume the construction of a plant in northern Japan as it sees a recovery in the market.
Investors were worried after U.S. chipmaker Advanced Micro Devices [AMD 7.88 -1.11 (-12.35%) ] warned of a decline in first-quarter sales.
Advantest, a maker of chip-testing equipment, lost 1 percent and Nikon Corp, which makes steppers, fell 3 percent.
Tokyo Steel Manufacturing was a big loser, tumbling as much as 8.3 percent after it warned of an annual operating loss, dashing expectations for a profit.
A stronger yen also hit a broad range of exporters, with the dollar dipping as low as 89.71 yen on Monday before edging back up to just under 90 yen, Investors fret about a stronger yen as it eats into exporter profits when repatriated.
Honda Motor lost 0.9 percent to 3,195 yen and Toyota Motor fell 1.7 percent to 3,985 yen.
Resource shares dragged on the market as well after oil fell below $75 on Friday, though it was holding steady in early Asian trade.
Metals lost ground on Friday as well with the exception of copper, which rose.
Mitsubishi Corp, Japan’s largest trading house, fell 1.8 percent to 2,250 yen and fellow trader Mitsui & Co lost 1.6 percent to 1,372 yen.
Seoul shares declined with losses by financials including KB Financial Group weighing on markets, but Samsung Electronics outperformed ahead of its results this week.
The Korea Composite Stock Price Index (KOSPI) erased some of its early losses to trade down by 0.3 percent.
Australian shares dropped 1.1 percent a one-month low, hammered by worries about the U.S. economy following the worst three-day slump on Wall Street in 10 months.
The S&P/ASX 200 index fell 32 points to 4,718.4, the third day of declines that has wiped out the market’s new year rally. The index touched a low of 4,679.9, its lowest intraday level since Dec. 22.
Turnover was light ahead of a public holiday on Tuesday for Australia Day, with many traders and fund managers taking Monday off.
Australian resource shares have come under pressure over the past week from indications that China is acting to prevent its economy from overheating, potentially dampening demand for local commodities exports.
Among the top miners, BHP Billiton slid 1 percent and Lihir Gold lost 0.3 percent.
Banks were weaker but outperformed their U.S. counterparts, with draconian regulations restricting banking activities in Australian seen as unlikely.
Major banks were down between 1.2 percent and 1.9 percent, with biggest losses by Australia and New Zealand Banking Group down 1.9 percent at A$22.21.
Defensive stocks fared better. Telecoms carrier Telstra Corp flat at A$3.37 and supermarket chain Woolworths up 0.1 percent to A$27.53 ahead of its sales results due on Wednesday.
Greater China markets were mixed as the Shanghai Composite inched up 0.1 percent but the Hang Seng Index opened 0.6 percent lower led by losses in resources and property stocks.
Bank of China fell 0.8 percent after the lender said it planned to issue as much as 40 billion yuan ($5.86 billion) of six-year convertible bonds to shore up its capital base and maintain its lending capacity.
CNNC International rose nearly 10 percent to its highest level in more than a week and was one of the top percentage gainers in Hong Kong after the firm said it would buy a stake in a uranium mine in Niger from its parent for HK$414 million ($53.3 million), a deal to be settled by the issue of convertible notes.
Aluminum Corp of China (Chalco) was down 1.59 percent after aluminum prices fell to a six-week low on Friday.
Southeast Asian stocks were weaker with the Straits Times Index giving up 0.3 percent while the KL Composite shed 0.5 percent.