Hong Kong: Asian shares pulled back on Wednesday after revived worries about the health of US banks slammed Wall Street, even as upbeat Australian growth figures reassured investors on the economic recovery’s staying power.
Japan’s Nikkei average led losses with a drop of 2.4% after a slide in financial shares hit US indices, while an overnight tumble in oil prices took a toll on resource-related shares such as oil and gas developer Inpex.
The slide has spooked some companies since September is historically a poor one for shares and comes just as many investors return from holidays.
“Given that the one-year anniversary of the Lehman Brothers (Holdings Inc.) failure is approaching, investors are especially easy to spook about financial shares. The whole sector is very sensitive to bad news,” said Noritsugu Hirakawa, a strategist at Oksasan Securities Co. Ltd in Tokyo. “Certainly indicators in various nations have been improving, but the fact that markets have been falling despite this suggests that a bit of downward adjustment may be in the offing.”
Some of Tuesday’s sharp moves partially reversed as markets settled down.
The Australian dollar climbed nearly 1% to $0.8335, bouncing back from its biggest one-day drop since June. The Australian currency got a boost after data showed the country’s second quarter gross domestic product (GDP) rose a surprisingly strong 0.6% from the previous quarter, reviving expectations for Australian central bank to start raising policy rates from the current 3% as soon as November.
South Korea said the economy grew at the strongest pace in five years in the second quarter, faster than expected, and Fitch Ratings lifted the outlook on the country’s credit rating to stable from negative.
The MSCI index of Asia-Pacific shares outside Japan shed around 1.4%, pressured by a 2.2% drop in the US’ Standard & Poor’s 500-stock index on Tuesday. Despite the strong GDP figure, Australian shares lost 1.7%, hobbled by the losses across the region.
Helping limit losses in Asia, the Shanghai Composite index rose 1.2%, aided by gains in China Petroleum and Chemical Corp. and PetroChina Co. after China hiked fuel prices to a near-record high. The index was up for a second day running. and seemed to regain its composure after a nearly 7% sell-off on Monday.
Hong Kong shares dropped 1.8% to a six-week closing low as anxiety about the global financial sector dragged down shares in HSBC Holdings Plc., while Beijing’s latest fuel price hike sent airline shares diving.
Elaine Lies in Tokyo contributed to this story.