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Asian stocks slump after heavy Wall Street losses

Asian stocks slump after heavy Wall Street losses
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First Published: Thu, Jun 02 2011. 03 42 PM IST
Updated: Thu, Jun 02 2011. 03 42 PM IST
Hong Kong: Asian shares tumbled on Thursday, following heavy losses on Wall Street after another batch of weak data stoked concerns over the state of the global economy.
Tokyo was also weighed by political uncertainty as Prime Minister Naoto Kan faced a vote of no-confidence, adding to investors’ nervousness about the already struggling economy.
Tokyo slumped 1.69%, or 164.04 points, to 9,555.04, Seoul sank 1.27%, or 27.14 points, to 2,114.20 and Sydney dived 2.27%, or 106.9 points, to 4,600.4.
In the afternoon Hong Kong lost 1.50% and Shanghai was 1.86% off.
Regional stocks were given a bad start when the Dow suffered its worst performance in several months, diving 2.22% on Wednesday while the broader S&P 500 fell 2.28% and the tech-rich Nasdaq lost 2.33%.
Traders in the United States went into a sell-off as they digested a slew of miserable data suggesting the world’s number one economy is stalling.
Payrolls firm ADP said the private sector added 38,000 jobs in May, well below the 170,000 expected and raising concerns that key government payroll figures out on Friday will also be worse than hoped.
The Institute of Supply Management’s manufacturing survey plummeted nearly seven percentage points from April to a 19-month low.
Adding to dealers’ woes, US auto sales in May fell 8.3% from April and 3.7% year-on-year, according to the research firm Autodata.
The market was not helped when, late in the session, Moody’s rating agency again downgraded Greek debt and gave it a negative outlook, raising the already high stakes in rescue negotiations for the imperiled eurozone member.
On Wednesday manufacturing data across Asia pointed to an easing in the region’s leading emerging economies, with the purchasing managers’ indexes in China, India, South Korea and Taiwan showing slower growth.
“The US data were atrocious, China still seems on course to raise rates in June, Moody’s cut its rating on Greece, and Japan’s politics is in a shambles -- so we have all the selling factors lined up today,” Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, told Dow Jones Newswires.
In Japan, embattled Prime Minister Kan survived a no-confidence vote -- announced after the market closed -- but concerns over his leadership continue to dog Asia’s number two economy, which is mired in debt and deflation.
Before the poll, which was called by the conservative opposition over his handling of the 11 March quake and atomic crisis, he vowed to step aside once he had overseen the country’s recovery disasters.
The dollar rose to ¥80.97 in early Tokyo trade, from ¥80.91 late New York Wednesday while the euro edged up to $1.4375 from 1.4331.
The single European unit was at ¥116.44, up from ¥115.99.
Oil was down. New York’s main contract, light sweet crude for July delivery, lost 57 cents to $99.72 a barrel and Brent North Sea crude for July delivery dipped 31 cents to $114.22 in the afternoon.
Gold opened at $1,541.50-$1,542.50 per ounce, up from its Wednesday close of $1,530.50-$1,531.50.
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First Published: Thu, Jun 02 2011. 03 42 PM IST
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