- Equities in Japan and Hong Kong lead retreat across region
- Nomura Holdings drops most since 2011 as overseas losses widen
Asian stocks fell as the rout in oil and disappointing earnings spurred a global selloff of risk assets amid deepening concern that global growth is weakening.
The MSCI Asia Pacific Index dropped 2.3 percent to 118.91 as of 5:01 p.m. in Tokyo, as shares tumbled in Japan and Hong Kong. Oil’s collapse and worries about a China slowdown have continued to roil markets around the world, with the regional gauge sliding 9.9 percent this year. The slump in crude has taken its toll on energy producers, with BP Plc’s fourth-quarter profit tumbling 91 percent and Exxon Mobil Corp. cutting its drilling budget to a 10-year low.
“The underlying fundamentals are deteriorating and the talk of recession is getting louder,” Chris Weston, chief market strategist in Melbourne at IG Ltd., said by phone. “When you see BP coming out with disastrous results and when you see Exxon cutting back on expenditures again, you realize the implication weak oil has on economies. How much more can central banks do from here?”
The Bank of Japan surprised markets with a stimulus boost last week, providing relief to turbulent markets around the world. The upturn was short-lived, as anxiety took root that the drop in oil and wider financial turmoil will impact growth. Citigroup’s Economic Surprise Index indicates data in Group of 10 economies is falling short of estimates by the most since May 2013.
Japan’s Topix index dropped 3.2 percent as brokerages slumped after Nomura Holdings Inc.’s earnings disappointed. South Korea’s Kospi index lost 0.8 percent. Australia’s S&P/ASX 200 Index slid 2.3 percent. New Zealand’s benchmark gauge and Taiwan’s Taiex both retreated 0.8 percent. Singapore’s Straits Times Index slipped 1.3 percent. Hong Kong’s Hang Seng Index fell 2.3 percent, dropping for a third straight day.
Chinese stocks dropped, extending last month’s rout, as traders unwound bullish bets and plunging oil prices weighed on energy producers. The Shanghai Composite Index slipped 0.4 percent, extending this year’s decline to 23 percent. The Hang Seng China Enterprises Index dropped 2.5 percent, near the lowest level in almost seven years.
Nomura tumbled 10 percent in Tokyo after reporting a 49 percent drop in third-quarter profit. IHI Corp. slumped 20 percent after the Japanese maker of jet engine parts and rocket propulsion systems forecast a loss and said it will skip a dividend. AIA Group Ltd. and Manulife Financial Corp. plunged at least 4.8 percent in Hong Kong amid concern that China may place restrictions on the buying of overseas insurance.
E-mini futures on the Standard & Poor’s 500 Index increased 0.1 percent on Wednesday. The underlying U.S. equity benchmark index declined 1.9 percent on Tuesday and the Dow Jones Industrial Average lost more than 290 points as investors shunned risk assets across the world.
Crude futures capped the biggest two-day drop in New York in almost seven years before government data forecast to show U.S. crude stockpiles gained, exacerbating a global glut. Oil declined as much as 1.6 percent on Wednesday before erasing losses.