Hong Kong: Asian markets fell on Thursday with Tokyo plunging more than 7% as investors took profits after weak Chinese data and signs the US Federal Reserve could start tapering off its massive stimulus measures.
Tokyo dropped on record volumes in the afternoon as investors panicked in the rush to take profit, with the index suffering its biggest daily percentage fall since the March 2011 earthquake-tsunami and the ensuing nuclear crisis.
Markets had earlier taken their lead from Wall Street, where stocks fell after Fed chief Ben Bernanke told Congress the Fed could scale back stimulus measures soon if economic conditions improved.
Tokyo closed down 7.32%, or 1,143.28 points, at 14,483.98, the heaviest plunge in terms of points since the IT bubble burst in April 2000.
Sydney slumped 1.99%, or 106.9 points, to close at 5,062.40. South Korean shares slid 1.24%, or 24.64 points, to finish at 1,969.19.
Shanghai ended down 1.16%, or 26.73 points, at 2,275.67, and Hong Kong dropped 2.54%, or 591.4 points to finish at 22,669.68.
Tokyo plummeted after HSBC said manufacturing activity in China contracted in May for the first time in seven months, in another sign of the weakness of recovery in the world’s second-largest economy.
The British banking giant’s preliminary purchasing managers’ index (PMI) fell to 49.6 this month from a final 50.4 in April, putting it below the 50 mark that indicates contraction.
Japan’s economy minister Akira Amari said the government was not worried about the sharp decline, which represented large-scale profit-taking triggered by the weak Chinese data.
“I thought the pace of the Nikkei’s rise recently was faster than expected,” Amari said, according to Dow Jones Newswires. “The weak Chinese data prompted investors to take profits all at the same time.”
Earlier in the day, the Nikkei 225 index at the Tokyo Stock Exchange, which closed at its best level in more than five years on Wednesday, had risen 0.23%.
Other markets had opened down after Dow Jones Industrial Average dropped 0.52% to 15,307.17 after Bernanke’s comments.
He stressed that current economic conditions did not warrant an end to the Fed’s aggressive stimulus measures, and US stocks had rallied during the early part of his highly anticipated testimony.
But Bernanke told lawmakers the Fed could start reducing its $85 billion-a-month bond-buying programme at one of the next few meetings. And stocks took a decisive lurch with the release of Federal Reserve meeting minutes that showed some officials had discussed curtailing bond purchases as soon as June.
“Fed chairman Bernanke’s remarks caused jitters among global investors,” said Peng Yunliang at Shanghai Securities.
Europe’s main stock markets also slumped at the start of trading, with Frankfurt and Paris down more than 2.0% and London slumping 1.42%.
Selling in Japan picked up pace when the yen climbed against the dollar in Asia afternoon trade, after recent sharp declines in the value of the Japanese currency.
The dollar plunged to 101.20 yen late in Asia from 103.31 yen in New York late Wednesday.
“No one believed the yen would keep on falling and stocks would keep on rising. It is not surprising if yen-buying momentum revives at any time,” said Daisuke Karakama, a market economist at the forex division of Mizuho Corporate Bank.
Prime Minister Shinzo Abe’s pro-spending, pro-growth policies have weakened the yen more than 20% against the dollar over the past six months and boosted share prices to their highest level in more than five years.
The euro was at 130.36 yen late Thursday in Asia from 132.58 yen and $1.2885 from $1.2855.
Oil extended losses in Asian trade, with New York’s main contract, light sweet crude for delivery in July, dropping 63 cents to $93.65 a barrel in the afternoon. Brent North Sea crude for July delivery shed 60 cents to $102.00.
Gold was at $1,388.57 at 1000 GMT from $1,392.70 late Wednesday.
In other markets:
—Bangkok fell 1.46% or 23.81 points to 1,607.46.
Banpu lost 1.85% to 318.00 baht, while Bangkok Bank dropped 1.82% to 216.00 baht.
—Jakarta ended down 1.66%, or 86.60 points, at 5,121.40.
Telekomunikasi Indonesia lost 1.21% to 12,200 rupiah, while palm oil firm Sinar Mas Agro Resources climbed 2.82% to 7,300 rupiah.
—Kuala Lumpur lost 0.61%, or 10.82 points, to close at 1,773.06.
Astro Malaysia Holdings fell 3.8% to 3.04 ringgit, while UEM Land Holdings shed 3.3% to 3.26. IHH Healthcare gained 0.3% to 3.95 ringgit.
—Singapore tumbled 1.8%, or 61.20 points, to 3,393.17.
DBS Bank dropped 0.75% to Sg$17.15 and vehicle distributor Jardine Cycle and Carriage fell 2.5% to Sg$46.86.
—Manila closed down 0.96%, or 70.69 points, at 7,314.38.
Top-traded SM Investments fell 0.42% to 1,198 pesos, while Universal Robina Corp. dropped 3.10% to 125 pesos. Metropolitan Bank shed 2.54% to 134.50 pesos.
—Taipei shed 1.92%, or 161.01 points, to 8,237.83.
Taiwan Semiconductor Manufacturing Co fell 3.57% to Tw$108.0 while leading integrated chip design house MediaTek lost 3.14% to Tw$370.0.
—Wellington fell 0.47%, or 21.59 points, to 4,588.59.
Telecom Corp was down 1.04% at NZ$2.375, Contact Energy was off 1.2% at NZ$5.20 and Fletcher Building was up 0.71% at NZ$8.49.
—Mumbai fell 1.93% or 387.91 points to 19,674.33 points.
Dow Jones Newswires contributed to this story.