HONG KONG (MarketWatch) — Chinese stocks traded Wednesday at their lowest level since 2009 as Asian markets suffered a sell-down and Japanese shares tumbled as many firms began to trade without rights to their latest dividend payouts.
The performance in Asia followed a downbeat session in the U.S., as criticism from a non-voting Federal Reserve member about the central bank’s latest round of monetary easing overshadowed solid economic data. Read more on the U.S. session.
“It appears as though the impact of recent central bank announcements is fading fast to be replaced by renewed global growth fears and yet more concerns about the lack of traction in delivering solutions to the fiscal crisis in Europe,” said Mitul Kotecha, strategist at Credit Agricole.
The Shanghai Composite (SHE:CN:000001) briefly fell below the 2,000-point level during the session, before ending 1.1% lower at 2,004.17. The Shenzhen Composite Index lost 2.2% to 816.79.
Japan’s Nikkei Stock Average (NIKKEI:JP:NIK) slumped 2%, Hong Kong’s Hang Seng Index (HONG:HK:HSI) and Taiwan’s Taiex gave up 0.8% each, South Korea’s Kospi (KOREA:KR:180721) lost 0.6% and Australia’s S&P/ASX 200 index (S&P:AU:XJO) shed 0.3%.
Investors in Asia were also monitoring developments in an ongoing territorial dispute between China and Japan, following reports Bejiing had rejected Tokyo’s invitation for talks at this week’s United Nations General Assembly. Read more on China rejecting talks with Japan.
In Tokyo, shares were pressured as several major names traded ex-dividend.
Among those losing ground, Advantest Corp. (TKS:JP:6857) fell 4.7%, Nikon Corp. (OTC:NINOY) (TKS:JP:7731) dropped 1.8% and Fanuc Corp. (TKS:JP:6954) (OTC:FANUY) declined 3%.
Honda Motor Co. (TKS:JP:7267) (NYS:HMC) dropped 4.9% after Deutsche Bank cut its rating on the stock to hold from buy.
Rival auto makers also fell. The Nikkei reported that Toyota Corp. (TKS:JP:7203) (NYS:TM) and Nissan Motor Co. (TKS:JP:7201) (OTC:NSANY) will reduce production in China as escalating anti-Japan sentiment was hurting sales.
Toyota shares fell 2.7%, while Nissan lost 2.6%.
A stronger yen (XTUP:USDJPY) provided another headwind for Japanese exporters. Canon Inc. (TKS:JP:7751) (NYS:CAJ) sank 4.5% and Casio Computer Co. (TKS:JP:6952) (OTC:CSIOY) dropped 2.9%.
Shares of Sharp Corp. (TKS:JP:6753) (OTC:SHCAF) ended unchanged, ending the session unchanged, after the Nikkei reported lenders were expected to approve funding that will enable the firm to stay afloat through the current fiscal year.
Japan-U.S. war games aimed at China dispute
Japan's military trains with the U.S. marines for the first time on island defense tactics.
In Hong Kong, financial firms were among the main drags. Major index component HSBC Holdings PLC (HKG:HK:5) dropped 1.4% and China Life Insurance Co. (HKG:HK:2628) (NYS:LFC) retreated 2.2%.
Automakers were other notable decliners, as BDY Co. (HKG:HK:1211) took a 9.8% dive, and Dongfeng Motor Group Co. (HKG:HK:489) (OTC:DNFGY) gave up 3.7%.
Shares of fashion retailer Esprit Holdings Ltd. (HKG:HK:330) (OTC:ESPGY) surrendered 6.9% as investors reacted to the firm’s fiscal-year earnings. Read more on Esprit's profit result.
Losses for resource shares weighed across Asia as growth concerns cast doubt on future demand for commodities.
“Weak data and an elusive growth turnaround in China have led us to lower our 2013 growth forecasts for much of [emerging Asia],” Barclays strategist Nigel Chalk wrote in a research report.
“Growth is stabilizing but, looking ahead, the recovery is likely to be subdued,” Chalk said.
Hong Kong-listed shares of Aluminum Corp. of China Ltd. (NYS:ACH) (HKG:HK:2600) and China Coal Energy Ltd. (OTC:CCOZY) (HKG:HK:1898) fell 2.8% and 2.7%, respectively. In Shanghai, they fell 1.9% and 1%, respectively.
Miners extended losses in Sydney as commodity futures mostly fell in electronic trading.
Diversified miners BHP Billiton Ltd. (ASX:AU:BHP) (NYS:BHP) and rival Rio Tinto Ltd. (ASX:AU:RIO) (NYS:RIO) gave up 1.3% and 2%, respectively.
Lynas Corp. (ASX:AU:LYC) tumbled 5% as the rare earths miner said it was forced to renegotiate its debt covenants as protests delayed the start of its Malaysian processing plant.
The losses came as the world’s third largest coal producer Anglo American PLC (LON:UK:AAL) said it plans to cut coking coal output in response to weak prices and increased costs. Read more on Anglo American planned output cut.