HONG KONG (MarketWatch) — Asian markets slumped Thursday, with resource-sector shares suffering hefty losses a day after commodity prices plunged on mounting fears about euro-zone debt troubles.
Concern about Asia’s economic health also contributed to the sell-off after data showing manufacturing activity weakened in China, while the Bank of Japan’s quarterly tankan survey showed worse-than-forecast conditions for large manufacturers.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.18% fell 1.7% to 8,377.37, Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO -1.63% declined 1.2% to 4,139.80, South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +0.05% shed 2.1% to 1,819.11 and Taiwan’s Taiex gave up 2.3% to 6,764.59.
Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.74% dropped 1.8% to 18,026.84, while China’s Shanghai Composite Index /zigman2/quotes/206600939/delayed CN:000001 -0.54% skidded 2.1% to 2,180.90, suffering its ninth decline in 10 trading days to finish at a level it hasn’t seen since March 2009.
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A preliminary reading of HSBC’s China Purchasing Managers’ Index showed the level of activity at mainland Chinese factories contract further in December, though the rate of decline was slower than that in November. Read more on China's PMI.
“While the pace of decline is probably reversing, there is still weakness there,” said Peter Esho, chief market strategist at City Index in Sydney. “The copper price continues to fall. It’s very hard to get excited about commodities and China, with the copper price falling the way it has been falling.”
“There isn’t that exuberance, that risk appetite. The market is very conservative, and it’s probably an indication of sentiment flowing in from the [Chinese] mainland,” Esho added.
The declines in Asia followed a third straight session of losses for U.S. stocks, as fears about Europe’s debt crisis persisted, and as the euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.0090% sank to an 11-month low. Gold and crude-oil were sold off sharply. Read more about the U.S. session.
“Concerns about the outlook for euro zone are leading portfolios away from risk. Equities and commodities ... underperformed a still-sinking euro,” strategists at Barclays Capital said.
Commodity-linked stocks were among the worst performers across the region. In Sydney, BHP Billiton Ltd. /zigman2/quotes/201448516/delayed AU:BHP -1.48% /zigman2/quotes/208108397/composite BHP +0.86% fell 1.8% and Rio Tinto Ltd. /zigman2/quotes/200083756/delayed AU:RIO -0.25% /zigman2/quotes/202627887/composite RIO +2.69% lost 2.8%; in Hong Kong, energy majors Cnooc Ltd. /zigman2/quotes/203421416/delayed HK:883 -1.93% /zigman2/quotes/204964401/composite CEO +0.61% and PetroChina Co. /zigman2/quotes/204979431/delayed HK:857 +1.14% /zigman2/quotes/205108732/composite PTR +2.65% lost 4.6% and 3%, respectively; and Korea Zinc Co. tumbled 8.8% in Seoul.
Gold miners also suffered, as gold futures extended their fall in electronic trading during Asian hours.
Hong Kong-listed Zhaojin Mining Industry Co. /zigman2/quotes/203361399/delayed HK:1818 +0.85% /zigman2/quotes/200275285/delayed ZHAOF 0.00% shed 8.2%, Shandong Gold-Mining Co. slumped 7.4% in Shanghai and Newcrest Mining Ltd. /zigman2/quotes/203840223/delayed AU:NCM +2.62% /zigman2/quotes/203286036/delayed NCMGY +2.75% lost 2.9% in Sydney. Read more on gold's 4.6% plunge in the U.S. trading.
The stock debuts for Chow Tai Fook Jewellery Group Ltd. /zigman2/quotes/208947199/delayed HK:1929 -1.21% and New China Life Insurance Co. /zigman2/quotes/206873923/delayed HK:1336 -1.83% did poorly in Hong Kong. The stocks tumbled 8% and 9.8%, respectively, from their respective initial public offering prices.
Earlier on Thursday, the Bank of Japan’s key tankan quarterly survey of business sentiment showed a sharper-than-expected deterioration in conditions for larger manufacturers. Read more on Japan's tankan survey.
Exporters were hit again, with Pioneer Corp. sinking 5.1%, and Casio Computer Co. /zigman2/quotes/202492162/delayed JP:6952 -1.66% /zigman2/quotes/202477994/delayed CSIOF -11.48% dropping 3.5% in Tokyo; in Seoul, Hyundai Motor Co. /zigman2/quotes/203763750/delayed HYMLY 0.00% dropped 2.6%, and Kia Motors Corp. shed 2%.
Shares in Olympus Corp. /zigman2/quotes/200860615/delayed JP:7733 +1.13% /zigman2/quotes/206207642/delayed OCPNY -2.64% plunged 20.8% in Tokyo on worries about its low equity-capital ratio. The firm said it aims to hold an extraordinary shareholders meeting in March or April, with the board under pressure in the wake of the accounting fraud which concealed large losses.