Tokyo: Asian stocks fell the most in almost a month after the International Monetary Fund (IMF) on Monday cut its economic growth forecasts for the US and Japan, where the government said problems at a stricken nuclear plant are worse than previously stated.
Honda Motor Co. Ltd, Japan’s second largest car maker by market value, lost 1.4%, leading Japan’s Nikkei 225 Stock Average toward its steepest decline since markets tumbled in the aftermath of the 11 March earthquake and tsunami. Tohoku Electric Power Co. Inc. fell 3.7% after a series of plus 6- magnitude aftershocks that have hit Japan in the past 24 hours. In Sydney, BHP Billiton Ltd, the world’s largest mining company, dropped 1.3% after crude oil and copper prices declined. CNOOC Ltd, a Chinese offshore oil producer, lost 2.9% in Hong Kong.
The MSCI Asia Pacific Index declined 1.5%, the most since 15 March, to 134.56 as of 7.37pm in Tokyo.
“Investor sentiment is deteriorating because it seems uncertainty is going to remain for a long period of time,” said Ikuo Mitsui, who helps manage $270 million at Vivace Capital Management Co. Ltd. There’s concern about how disruptions to Japan’s supply chain will affect the global economy. Higher gasoline prices mean a significant pressure on the US consumption, so the impact of oil prices on the global economy is significant.
About eight stocks fell for each that rose in the MSCI Asia-Pacific Index. The gauge has risen for three straight weeks as Japanese companies resumed production after last month’s earthquake, and as an improving US economy bolstered optimism the global recovery can be sustained.
Japan’s Nikkei 225 Stock Average fell 1.7%, the most since 15 March. As well as the 6.6 temblor on Monday, a magnitude-6.3 earthquake struck Chiba, the prefecture east of Tokyo, this morning and a magnitude 6.3 aftershock struck Fukushima prefecture this afternoon, according to the Japan weather agency. Also, Japan raised the severity rating of its nuclear crisis to the highest level, matching the rating of the 1986 Chernobyl disaster, as increasing radiation prompts the government to widen the evacuation zone.
Australia’s S&P/ASX 200 Index declined 1.5% and New Zealand’s NZX 50 Index slipped 0.3%. South Korea’s Kospi index retreated 1.6%, while Hong Kong’s Hang Seng Index sank 1.3%, the biggest drop since 17 March. China’s Shanghai Stock Exchange Composite Index declined 0.1% and Taiwan’s Taiex index slumped 1.7%.
Futures on the Standard and Poor’s (S&P) 500 Index lost 0.5% on Tuesday. In New York on Monday, the S&P 500 dropped 0.3% after oil dropped from a 30-month high as IMF cut its growth forecast for the world’s largest economy.
In Tokyo, Honda declined 1.4% to 2,862 yen. Toyota Motor Corp., the world’s largest car maker, lost 0.6% to 3,240 yen. Sony Corp., Japan’s largest exporter of consumer electronics, retreated 2.9% to 2,502 yen.
In Sydney, James Hardie Industries SE, the largest seller of home siding in the US, fell 2.6% to A$5.74. In Seoul, Samsung Electronics Co. Ltd, which receives 20% of its revenue from America, lost 1.3% to 882,000 won.
The US economy will expand 2.8% this year, slowing from 2.9% last year and less than the 3% growth for 2011 forecast in January, IMF said. The Washington-based fund also cut its estimate of Japan’s growth to 1.4% from 1.6% in the previous forecast after the 11 March earthquake and tsunami.
Tohoku Electric lost 3.7% to 1,358 yen. The utility on Monday said about 220,000 homes, mostly in Iwaki city, were without power. Softbank Corp., Japan’s third biggest wireless carrier, slipped 1.9% to 3,320 yen, biggest drag on the Nikkei 225. Fast Retailing Co. Ltd, Asia’s biggest clothing chain, declined 1.3% to 11,740 yen.
Japan has been hit by a series of major aftershocks in the past 24 hours, a month after the record quake that triggered a tsunami on 11 March, leaving 27,493 dead or missing and disabling Tokyo Electric Power Co. Inc.’s Fukushima Dai-Ichi nuclear plant. Japan’s nuclear safety agency today raised the severity rating of the crisis at the Fukushima Dai-Ichi nuclear plant to 7, the highest level.
The MSCI Asia Pacific Index lost 0.9% this year through Monday, compared with gains of 5.3% by the S&P 500 and 1.9% by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.2 times estimated earnings on average, compared with 13.6 times for the S&P 500 and 11.3 times for the Stoxx 600.
Toshiro Hasegawa and Kana Nishizawa in Tokyo contributed to this story.