Asian stocks fell, following declines in global equities, as concerns over global economic growth sapped confidence for risk assets, boosting the yen and dragging down Japanese shares.
The MSCI Asia Pacific Index slipped 1.2 percent to 128.41 as of 4:11 p.m. in Hong Kong, as equity markets from Hong Kong to South Korea slid more than 1.2 percent. Japan’s Topix index dropped 1.8 percent as the yen climbed 0.8 percent to 100.89 per dollar. Bank of England chief Mark Carney warned that risks from the U.K.’s vote to leave the European Union had started to crystallize as the central bank took steps to spur lending by reducing capital requirements for banks.
“Equities still exhibit a lot of risks,” Mark Lister, head of private wealth research at Craigs Investment Partners in Wellington, which manages about $7.2 billion, said by phone. “The lack of confidence and growth will weigh on sentiment. For anyone that’s reaped the benefits of the equity bull market it’s definitely time to consider taking some profits, if you haven’t already, and move to a more defensive stance.”
Asian equities are retreating after recouping declines seen in the immediate aftermath of last month’s Brexit vote amid speculation that central banks will step forward with stimulus measures. With odds of an interest-rate increase from the Federal Reserve this year effectively wiped out since the British referendum, monthly data on U.S. payrolls due Friday may provide clues as to the direction of the Fed’s next move.
Gauges of manufacturing and services on Tuesday both signaled lackluster growth for the euro area in June. U.S. factory orders fell 1 percent in May, exceeding economist estimates, while a final reading on durable goods orders showed a 2.3 percent decline.
Losses were broad-based across different sectors and markets. Commodity producers and and Japanese exporters posted the largest declines as Toyota Motor Corp. sank 1.7 percent in Tokyo and BHP Billiton Ltd. tumbled 3.8 percent in Sydney.
Hong Kong’s Hang Seng Index sank 1.2 percent and the Hang Seng China Enterprises Index of mainland Chinese firms listed in the city lost 1.6 percent. The Shanghai Composite Index rose, adding 0.4 percent to close above the 3,000 level for a second day.
Taiwan’s Taiex Index fell 1.6 percent and South Korea’s Kospi index slipped 1.9 percent. Australia’s S&P/ASX 200 Index declined 0.6 percent, while New Zealand’s S&P/NZX 50 Index managed to close 0.1 percent higher, advancing for an eighth straight session.
Markets in Indonesia, India, Singapore, the Philippines and Malaysia are closed Wednesday for holidays. E-mini futures on the S&P 500 Index slipped 0.2 percent after the underlying gauge lost 0.7 percent. Energy and financial shares were among the biggest losers in U.S. trading Tuesday.
Mazda Motor Corp. tumbled 6.1 percent. The carmaker’s Chinese joint venture will recall 74,310 sedans to replace Takata Corp. air bags after an investigation by the country’s safety regulator. Bucking the trend was Coca-Cola Amatil Ltd. in Sydney, jumping 4.6 percent after Morgan Stanley said the shares were cheap and advised buying the stock.
U.S. crude traded below $47 a barrel as the world’s top oil trader said prices won’t rise much further, dragging Asian energy producers lower.