Tokyo Hits 28-Year Low Amid Global Rout
|June 4th, 2012, 07:02 PM||#1 (permalink)|
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Tokyo Hits 28-Year Low Amid Global Rout
The Tokyo market slumped to a 28-year low on Monday as Asian shares dived on fears of a nightmare scenario of euro-zone breakup, U.S. economic relapse and a sharp slowdown in China.
Investors hedged against global financial and economic crisis, heading for havens such as the benchmark 10-year Japanese government bond whose yield fell below 0.80 percent to its lowest since July 2003. Ten-year JGB futures prices jumped to a 19-month high.
The FTSE CNBC Asia 100 Index [.FTFCNBCA 5546.94 -111.29 (-1.97%)], which measures markets across Asia, shed 2.1 percent.
Japan's shares fell sharply, with the broader Topix index hitting a 28-year low, as investors rushed to sell riskier assets on disappointing U.S. jobs data, deepening debt woes for the euro zone and slowing Chinese growth.
The more tech-heavy Nikkei index also slid and has now dropped 19 percent from a one-year high marked on March 27, flirting with a fall into bear market territory, often defined as a slide of 20 percent within two months.
The broader Topix index lost as much as 2.4 percent to 692.18, a level not seen since late 1983. Last week, it fell for a ninth straight week, marking its longest such run since 1975.
Major exporters suffered steep losses as the prospect of slowing demand for their products was exacerbated by strength in the safe-haven yen versus the euro and the dollar. Mazda Motor, which has high exposure to Europe, skidded 7.3 percent, while Toyota Motor, Nissan Motor and Honda Motor shed between 3.5 and 3.7 percent.
Canon tumbled 5.2 percent to 2,893 yen, breaking the 3,000 yen level for the first time since July 2009 after JP Morgan downgraded the camera and printer maker's rating by two notches and halved its target price. The company said it would buy back 50 billion yen worth of its own shares after the market close.
Sony, the maker of Walkman and Playstation, fell 1.7 percent to hit a fresh 32-year low.
The Topix ended the day down 1.9 percent at 695.51 in moderate trade with 1.7 billion shares changing hands. The Nikkei [.N225 8295.63 --- UNCH ] dropped 1.7 percent to 8,295.63 to a six-month low.
South Korean shares ended at their lowest in two-and-a-half weeks, just above an intraday low for the year set during the session, as U.S. jobs data aggravated worry about a global slowdown and sent investors fleeing risky assets.
The Korea Composite Stock Price Index (KOSPI) [.KS11 1783.13 --- UNCH ] fell 2.8 percent to close at 1,783.13 points after setting a 2012 low of 1,776.85 points late in the session.
Growth-sensitive, cyclical stocks such as builders and shipyards underperformed on the global economic woes. Hyundai Engineering & Construction slid 5.8 percent, while Samsung Heavy Industries fell 5.7 percent.
Crude oil refiners tumbled after oil prices dipped below $100 to a 16-month low, with SK Innovation plunging 7.7 percent while GS Holdings shed 5.1 percent.
The KOSPI 200 benchmark of core stocks closed down 2.6 percent, with 166 listings out of the 200 components trading in the red. Index heavyweights LG Chem slid 5.9 percent and SK Hynix fell 5.3 percent.
Australian shares slumped 1.9 percent to a six-month low as investors joined a global flight out of risky assets, triggered by fresh concerns over a global economic slowdown after anemic U.S. jobs figures and soft Chinese factory data.
The day's losses took the market's slump since May 1 to 10.4 percent, meeting the usual definition of a market correction.
Heavy losses were posted across the board, with global miner Rio Tinto down 4.7 percent, steelmaker BlueScope down 9.4 percent to a record low, and several major retailers losing more than 3 percent.
Australia's top miners were especially hard hit on Monday, tied to the fortunes of global growth. BHP Billiton dropped 3.1 percent to A$30.75, its lowest level since March 2009 and Rio Tinto was at its lowest since July 2009.
Losses were heavy in the discretionary retail sector, with many retailers down more than 3 percent. Electronics chain JB Hi-Fi fell 6.1 percent and camping gear store Kathmandu fell 5 percent.
Shares in Brambles, the world's top pallet supplier, were halted ahead of an equity raising after the firm called off the sale of its $2 billion Recall information management business because of low offers and choppy markets.
The benchmark S&P/ASX 200 index [.AXJO 3985.00 --- UNCH ] slumped 78.9 points to 3,985, losing grip on the psychological 4,000 level and its lowest mark since Nov. 25. For the year, the benchmark index is down 1.8 percent.
In China, the Shanghai stock market slumped 2.7 percent, its steepest drop in six months, following a sell-off in U.S. and European markets, as investors globally reacted to signs that a nascent global economic recovery has hit a rut.
The Shanghai Composite [.SSEC 2308.55 -64.89 (-2.73%) ] closed at 2,308.6 points, down from Friday's close of 2,373.4.
Finance and insurance stocks led the day's decline, diving by more than 16 percent, followed by other cyclicals including transport and machinery manufacturing.
Hong Kong shares tumbled 2 percent to their lowest close for the year on Monday.
The Hang Seng index [.HSI 18185.59 -372.75 (-2.01%) ] ended down 2 percent and turned negative on the year, while the China Enterprises index [.HSCE 9375.33 --- UNCH ] of top locally listed mainland firms fell 2.6 percent.
The worst-hit sectors in Hong Kong remained cyclicals such as materials, mining and energy that are closely linked to economic growth. Sub-indices for the materials and energy sectors fell 3 and 2.5 percent, respectively.
Steel firm Maanshan Iron & Steel [0323.HK 1.72 -0.13 (-7.03%) ] dropped 7 percent while larger peer Angang Steel [0347.HK 4.20 -0.22 (-4.97%) ] fell 5 percent, both extending their May rout. Oil major CNOOC [0883.HK 13.22 -0.36 (-2.62%) ] dropped 2.6 percent while China's largest coal producer China Shenhua [1088.HK 26.40 -1.15 (-4.19%) ] dropped 4.2 percent.
The biggest drag on the Hang Seng, however, was HSBC [0005.HK 60.05 -0.70 (-1.15%) ], which fell 1.2 percent to a 4-1/2 month closing low.
Sands China [1928.HK 25.00 -1.25 (-4.75%) ] which had its first trading day as a part of the Hang Seng Index, fell 4.8 percent after Deutsche Bank cut its target prices of Macau gaming stocks by 6 to 13 percent, partly on slowing growth in the gambling encave. Growth in gambling revenue from Macau slowed to a three-year low, data showed last Friday.
Taiwan stocks posted their worst fell in more than six months, hit by a regional sell-off on fears of a global economic downturn, and by concerns about a planned capital gains tax plan.
Finance minister Chang Sheng-ho told reporters on the sidelines of the legislative session that the ruling Nationalist Party will stick to its tax plan, dashing investor hopes the party might reconsider due to mounting opposition from some corporate executives and investors.
The main TAIEX index tumbled 3 percent or 211.43 points to 6,894.66, its biggest percentage slump since November, to its lowest closing level since December.
India's main index edged higher, recovering from an earlier fall of as much as 1.4 percent to snap three day of losses, as hopes for rate cuts sparked gains in banks, while bargain-hunting lifted blue chips.
Falling global oil prices as well as declining core inflation and growth in India give the Reserve Bank of India room to adjust interest rates, a deputy governor said, two weeks before a policy review.
India's main 30-share BSE index rose 0.3 percent to 16,008.75 points. The broader 50-share NSE index rose 0.14 percent to 4,848.15 points.
In Southeast Asia, Singapore's Straits Times Index [.FTSTI 2698.90 -46.81 (-1.7%)] and Malaysia's KLCI [.KLSE 1555.18 --- UNCH ] both lost ground, ending down 1.7 and 1.2 percent respectively.
The New Zealand market is closed on Monday for the Queen's birthday holiday.