Asian Stocks Fall After U.S. Shares Slide Amid Growth ConcernAdam Haigh
Asian stocks fell, after U.S. markets posted the biggest weekly drop in three years, amid concern that a tumbling oil price signals weakness in the outlook for global economic growth.
Toyota Motor Corp., the world’s biggest carmaker, slid 2.5 percent in Tokyo. Japan Airlines Co. fell 3.4 percent after the carrier’s rating was lowered to neutral from buy at UBS AG. Korea Electric Power Corp. declined 5 percent after the nation’s president said electricity prices should reflect the lower cost of oil.
The MSCI Asia Pacific Index dropped 1 percent to 135.70 as of 4:10 p.m. in Hong Kong, headed for its lowest close in two months. The Standard & Poor’s 500 Index tumbled 1.6 percent on Dec. 12, extending losses in the final hour, as material shares led the retreat. The Dow Jones Industrial Average sank 3.8 percent last week, its biggest such drop since November 2011.
“The oil price collapse is symptomatic of a lack of global demand,” said Stewart Richardson, who helps oversee $180 million at RMG Wealth Management LLP in London. “Developed equity markets have become more jittery. We don’t see central banks as being in a position to appease markets at the moment.”
About $2 trillion was erased from the value equities across the world last week as oil prices slumped, raising concern over the strength of the global economy. West Texas Intermediate crude traded near a five-year low after losing 12 percent last week.
Japan’s Topix index declined 1.5 percent to its lowest close since Nov. 17. Prime Minister Shinzo Abe’s ruling coalition won more than two-thirds of the 475 seats in lower-house elections seen as a referendum on his economic policies after the country entered recession after a tax increase in April.
Since Abe took office two years ago, the Topix has surged more than 70 percent as public spending and unprecedented monetary easing by the Bank of Japan pushed the yen to a seven-year low against the dollar. The nation’s currency strengthened 0.3 percent to 118.39 per dollar today.
The quarterly Tankan index for large manufacturers fell to 12 from 13 in September, the Bank of Japan said today, missing the median estimate of economists for a reading of 13. A positive number means optimists outnumber pessimists.
Australia’s S&P/ASX 200 Index slipped 0.6 percent as consumer staples and financial shares led declines. The government this weekend forecast a wider budget gap this year as plunging iron-ore prices erode tax revenue.
A group of people were taken hostage by a gunman in a cafe at Sydney’s Martin Place, where a black flag with Arabic writing was placed in a window. Five hostages have fled from the restaurant since the nine-hour standoff with police began.
New Zealand’s NZX 50 Index fell 0.3 percent. South Korea’s Kospi index lost 0.1 percent, while Taiwan’s Taiex index slipped 0.5 percent. Singapore’s Straits Times Index declined 1 percent.
The Jakarta Composite Index sank 1 percent as the Indonesian rupiah tumbled to the lowest levels since the Asian financial crisis. Thailand’s SET Index dropped 8.6 percent, the biggest decline in six years, after PTT Exploration & Production Pcl and its parent tumbled. The two stocks represent 10 percent of the SET by weighting.
Hong Kong’s Hang Seng Index fell 1 percent, while the Hang Seng China Enterprises Index of mainland stocks traded in the city lost 0.2 percent. The Shanghai Composite Index added 0.5 percent, erasing losses of as much 1.6 percent, as construction and railway companies climbed on speculation the government will take more steps to support growth.
China is likely to see economic expansion decelerate to 7.1 percent next year as a slowdown in real estate investment continues, according to Ma Jun, chief economist of the People’s Bank of China’s research center. Fiscal stimulus will help Chinese stocks extend gains next year, according to CLSA Ltd.