Asia stocks sag on lingering global growth anxiety
TOKYO: Asian shares were largely lower on Thursday after more dour economic news in China and the United States piled pressure on riskier assets.
Spreadbetters expected Britain’s FTSE, Germany’s DAX and France’s CAC to open slightly lower on continuing fallout from the Volkswagen diesel emissions scandal.
Worries that an eventual tightening in US monetary policy and slower growth in China could knock the global economy have scared off investors, particularly those invested in stocks and commodities.
MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.2 per cent after having posted their biggest single- day fall in almost a month the previous day. Shanghai shares trimmed a chunk of early gains and were up only 0.3 per cent as of 0511 GMT, reflecting how investor confidence in the economy remains wobbly at best, while South Korea’s Kospi nudged up 0.2 per cent.
Hong Kong shares fell on Thursday as concerns about slowing global demand offset gains in mainland China markets.
The Hang Seng index fell 1 per cent to 21,095.98 points, while the China Enterprises Index lost 1.1 per cent to 9,469.81 points.
Among the most actively traded stocks on Hong Kong’s main board were Ngai Shun Holdings, down 9.5 per cent to HK$0.02, Carnival Group, up 9.5 per cent to HK$1.04 and China Properties Investment Holdings, down 6.0 per cent to HK$0.14. Total trading volume of companies included in the HSI index was 1.6 billion shares.
Japan’s Nikkei average, opening for the first time since Friday after a string of national holidays, tumbled 2.2 per cent, edging near its seven-month low touched earlier this year.
Shares of Japanese automakers sagged in a delayed reaction to the Volkswagen scandal.
The scandal has raised fears among economists that it could develop into a major threat to Europe’s largest economy.
Wall Street also lost ground on Wednesday, dragged down by economic reports portraying US factory growth as tepid and China in its worst manufacturing contraction since the global financial crisis.
“Investors will be time being.
Markets will become steadier only when uncertainties over Chinese economy and the US monetary policy diminish,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.
Although shares in Volkswagen rose 5.2 per cent on Wednesday, they had lost about a third of its value in the previous two sessions.
In the currency market, the euro was helped by comments from European Central Bank President Mario Draghi that the bank needed more time to decide on whether further stimulus is required.
The euro rose to $1.1193, having bounced back from three-week low of $1.1105 touched on Wednesday.
The spectre of higher US interest rates and slower growth in China continues to weigh on many emerging market currencies, however.
The Brazilian real sank to an all-time low of 4.179 per dollar, clobbered by a recession, fiscal deficit and political instability following corruption allegations against leading politicians in Brazil, which has the world’s seventh largest economy.
The Australian dollar, often used as a proxy for China-related trades, struggled near a two-week low of $0.6989.
“Unfortunately for Australians, the lack of desire to own the currency has more to do with external than domestic factors.
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