Hong Kong: Asian shares edged down on Thursday as worries about Greece and the outlook for the global economy made investors cautious.
Confidence ebbed ahead of the key monthly US non-farm payrolls report on Friday. The dollar fell to its lowest level in three months against the yen as declines in regional stocks prompted a cutback in risky asset positions.
Traders were also prompted to cut long dollar/yen positions after Su Ning, a deputy governor of the People’s Bank of China, said that China’s central bank can prevent inflation from spinning out of control this year and is also confident of containing inflation expectations.
“There is a possibility that February inflation could be higher than expected and this could lead the authorities to tighten monetary policy,” Cao Xuefeng, analyst at Western Securities, said.
The MSCI index of Asian shares outside Japan was down about 0.6% on worries about the robustness of the global economic recovery and doubted the debt crisis in Europe would end immediately.
The index is down more than 3% so far this year as sovereign debt worries, jitters about stimulus withdrawal and a patchy economic picture hurt risk appetite.
“The rally was not very strong, most probably just a little bit of short covering at the open. There are remaining concerns over the Greek sovereign debt situation,” said Andrew Sullivan, a sales trader with broker MainFirst Securities in Hong Kong.
He added investor worries have remained after data showed lending by China’s top banks was down substantially on the month in February as it indicated that the slowing measures being implemented were having an impact.
Shanghai stocks tumbled 2.4% in its biggest one-day fall in five weeks and Hong Kong shares shed 1.4%, with financial shares weak as persistent concern over policy tightening spurred investors to take profit.
“Worries about policy uncertainty and liquidity encouraged profit-taking,” said Li Wenhui, senior analyst at Huatai Securities in Nanjing. He cited new share supplies and monetary policy tightening as negative factors that continued to loom over the market.
Japan’s Nikkei average fell 1.1%, with exporters hurt by the stronger yen.
Shares in South Korea and India fell less than half a per cent, while those in Taiwan and Singapore lost more than half a per cent.
Gold retreated from the 6-“ week high it hit in the previous session as the euro edged lower versus the dollar, but trading was subdued ahead of a European Central Bank announcement on interest rates later.
Oil slid towards $80 a barrel as the dollar strengthened, dragging fuel prices off seven-week highs.