Asian stocks plunge on negative sentiment

> Bloodletting on trade, geopolitical fears taking a toll on economy

HONG KONG: Asian markets tumbled yesterday, tracking a plunge on Wall Street, with trading floors awash with negativity on geopolitical concerns and following weak US economic and earnings data.

The bloodletting is the latest to hit global equities, which have been pummelled this year by a wave of problems led by the China-US trade war and rising Federal Reserve interest rates.

On top of those headwinds in recent weeks has been a brewing nuclear standoff between the US and Russia, the high-profile killing of a Saudi journalist, Brexit and Italy’s budget row with the European Union.

US stocks have broadly managed to avoid the hefty selling witnessed elsewhere – even clocking up a few record highs – thanks to a strong economy and mostly positive corporate results.

However, New York has finally succumbed as investors contemplate an end to the decade of cheap credit and the imposition of steep tariffs by the US and China in their ever-deepening trade row.

The Dow and the S&P 500 wiped out their gains for the year, while the Nasdaq dived more than 4% as the under-pressure tech sector took another beating.

The selling came after data showed US home sales were at their slowest pace for nearly two years, while the Fed said firms nationwide are worried about the tariffs as well as labour shortages.

And those losses filtered through to Asia, where Tokyo was scythed 3.7% and Sydney sank 2.8% to its weakest level in a year.

Hong Kong lost 1%, with Cathay Pacific collapsing 3.8% after it admitted to suffering a major data leak affecting up to 9.4 million passengers worldwide. The airline had fallen 6.5% to a nineyear low at one point.

Seoul shed 1.6% as data showed the South Korean economy expanded at a slower pace than expected in the third quarter.

Wellington lost 0.9%, while Manila and Taipei each fell 2.4%. Bangkok, Mumbai and Singapore were also sharply lower.

However, Shanghai ended with a marginal gain thanks to a late afternoon rally with speculation state-backed funds stepped in to prop up the troubled market, which has lost a fifth of its value this year.

In early trade London fell 0.8%, Paris shed 0.% and Frankfurt gave up 0.4%. – AFP