HONG KONG (MarketWatch) — Asian markets slumped Monday as a weak U.S. jobs report added to a growing list of investor worries about a fragile global economy, sending Japanese stocks to their lowest in more than two decades, while Hong Kong shares erased year-to-date gains.
“Growth concerns are increasingly accompanying euro-zone tensions as major weights on market sentiment,” said Mitul Kotecha, Credit Agricole’s head of global foreign-exchange strategy.
The Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -1.09% fell 2% during the session, wiping out its gains in the year to date, and giving the Hong Kong benchmark a net loss of 1.4% at Monday’s close.
China’s Shanghai Composite index /zigman2/quotes/206600939/delayed CN:000001 -0.06% slumped 2.7%, South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -1.49% skidded 2.8%, Taiwan’s Taiex plunged 3% and Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO -0.33% lost 1.9% to 3,985, finishing below the 4,000 mark for the first time since November.
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In Tokyo, the benchmark Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.39% sank 1.7%, while the broader Topix lost 1.9% to end the day at 695.51, its lowest closing level since at least 1985.
At its finish on Monday, the Nikkei is down 19.1% from the 52-week high of 10,255.15 that it touched on May 27. The Topix, meanwhile, is down 20.9% from its July 8, 2011 high of 879.48.
The losses in Asia came on the heels of a terrible day for U.S. stocks Friday, when all key benchmarks fell more than 2%, while the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.78% gave up all of its gains registered earlier in the year. Read more on U.S. stocks.
The U.S. economy added just 69,000 jobs in May, the smallest net increase in nonfarm payrolls in a year, the government reported. Economists surveyed by MarketWatch had expected a 165,000 increase.
“Basically, the jobs number was much worse than expected,” said Andrew Sullivan at Piper Jaffray. “The U.S is still growing, but growth is small and prone to setbacks.”
“It does now appear that the global slowdown, and events in Europe in particular, are beginning to have a more marked impact on the U.S. economy,” said economists at Capital Economics.
While few sectors or stocks were spared in Monday’s sell-off, several exporters, financials and resource sector stocks suffered a harsh beating.
In Japan, shares of Nikon Corp. /zigman2/quotes/203281219/delayed JP:7731 -0.75% plunged 4.9%, Mazda Motor Corp,. /zigman2/quotes/204777714/delayed JP:7261 -0.11% /zigman2/quotes/206646681/delayed MZDAF +3.07% slumped 7.3% and Toyota Motor Corp. /zigman2/quotes/203803129/delayed JP:7203 +1.10% /zigman2/quotes/200537742/composite TM -0.05% slid 3.5%.
Sony Corp. /zigman2/quotes/208567357/composite SNE -1.20% /zigman2/quotes/201361720/delayed JP:6758 -0.57% shares dropped 1.7% to ¥996 yen, its first close below ¥1,000-level in at least the past 27 years for which FactSet Research data is available, and 55% lower than its price of ¥2,226 on July 8, 2011.
The declines came although the dollar held its head above the ¥78-level for most of Monday, after briefly dropping below on Friday after the U.S. jobs data. Read more on currencies.
Exporters and other companies dependent on global demand also fared badly elsewhere.
SK Hynix Inc. /zigman2/quotes/203669196/delayed HXSCL 0.00% tumbled 5.3%, and LG Display Co. /zigman2/quotes/204466928/composite LPL -1.42% sank 5.2% in Seoul, Esprit Holdings Ltd. /zigman2/quotes/205943307/delayed HK:330 -1.41% /zigman2/quotes/209270177/delayed ESHDF -2.78% /zigman2/quotes/205943307/delayed HK:330 -1.41% lost 3.1% in Hong Kong, and in Taipei, HTC Corp. /zigman2/quotes/202337967/delayed HTCKF +2.29% fell 6.5% while Inotera Memories Inc. slumped by the day’s 7% limit.