Stocks fall on recovery fears

Stocks fall on recovery fears
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First Published: Wed, Oct 28 2009. 10 21 PM IST
Updated: Wed, Oct 28 2009. 10 21 PM IST
London: Major Asian markets fell by about 1.5% or more and Wall Street was expected to dip on the open as signs American consumers were struggling undermined hopes for a stronger turnaround in the world’s largest economy.
Asia’s losses followed a choppy session on Wall Street Tuesday, where an unexpected drop in consumer confidence gave investors few reasons to venture further into a market that’s run massively higher in the last eight months.
The news was the latest evidence that US shoppers, their budgets tightened by the economic crisis and rising unemployment, aren’t likely to return to their spendthrift ways anytime soon. It was all the more unsettling in Asia, coming ahead of the vital Christmas holiday season, when major export companies rely heavily on Americans to increase their spending on electronics, toys and other goods.
“The figure sparked worries that US consumer spending in the crucial Christmas season will be stagnant. Investors are now bracing for very weak retail sales in the upcoming season,” said Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd in Tokyo.
In Japan, the benchmark Nikkei 225 index lost 137.41 points, or 1.4%, to 10,075.055. Hong Kong’s main index retreated 408.01, or 1.8%, to 21,761.58. South Korea’s Kospi dived 2.4% to 1,609.71, leading the declines in Asia. Australia’s market fell 1.4%, and Taiwan’s market lost 1.6%. China’s Shanghai index recouped its losses to close up 0.3%.
The mixed signals about the scale of recovery in the US economy weighed on oil prices, with benchmark crude for December delivery lower by 70 cents at $78.85 (Rs3,721.72) a barrel in European trade.
Jeremiah Marquez in Hong Kong and Shino Yuasa in Tokyo contributed to this story.
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First Published: Wed, Oct 28 2009. 10 21 PM IST
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