By Laura He, MarketWatch
HONG KONG (MarketWatch) — Japanese stocks suffered their worst daily drop in more than three months, as the economy entered a recession unexpectedly in the third quarter.
The Nikkei Average /zigman2/quotes/210597971/delayed JP:NIK +0.89% tumbled 3% to 16,973.80, posting its biggest daily percentage fall since early August. The broader Topix index /zigman2/quotes/210598092/delayed JP:180460 +0.37% slid 2.5%.
Meanwhile, the yen /zigman2/quotes/210561789/realtime/sampled USDJPY -0.0862% rose versus the dollar, with the greenback buying ¥116.12 compared with ¥116.29 in the prior session.
Among market movers, life insurer Dai-Ichi Life Insurance Company, Ltd. /zigman2/quotes/208507587/delayed JP:8750 -0.85% sank 4.8%, camera maker Olympus Corp. /zigman2/quotes/200860615/delayed JP:7733 +3.55% slid 4.5%, electronic component maker TDK Corporation shredded /zigman2/quotes/208948266/delayed JP:6762 +1.80% 4.3%, and industrial-robot maker Fanuc Corporation /zigman2/quotes/202054799/delayed JP:6954 +0.15% declined 4%.
In Hong Kong, the Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.46% ended with a 1.2% loss after five straight sessions of gains, as the long-awaited Hong Kong-Shanghai Stock Connect program, allowing direct trade between the two markets, officially started on the same day.
A day earlier, statistics from China’s top banking regulator showed that non-performing loans at banks was higher as of the end of September, marking a 12th consecutive quarter of rising bad loans. The non-performing-loan ratio climbed to 1.16%, marking the highest level in four years.
Chinese banks suffered broad-based declines, with China Citic Bank Corporation Ltd. /zigman2/quotes/205809997/delayed HK:998 +0.24% skidding 4.1%, China Minsheng Banking Corp., Ltd. /zigman2/quotes/208095167/delayed HK:1988 +0.55% falling 2.1%, and Bank of Communications Co., Ltd. /zigman2/quotes/203442771/delayed HK:3328 +0.97% dropping 2%.
However, several local Hong Kong banks bucked the weaker trend, with BOC Hong Kong Holdings Ltd. [ /zigman2/quotes/200479222/delayed HK:2388 -0.18% , the only clearing bank for yuan transactions in Hong Kong, edging 0.2% higher.
Over on the mainland, the Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP -0.32% also gave up its initial advance and slipped 0.2%.
Other major Asian markets also closed lower, as Sydney’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +0.43% lost 0.8%, and Seoul’s Kospi Composite Index /zigman2/quotes/210598069/delayed KR:180721 +0.07% dipped 0.1%.