File photo: A businessman looks at an electronic quotation board of the Tokyo Stock Exchange market in Tokyo. (Photo: AFP/Toshifumi Kitamura)
TOKYO: Asian shares fell on Thursday (May 7) after Wall Street dropped on weaker-than-expected US economic data and a warning from Federal Reserve Chair Janet Yellen that stock valuations were “quite high”.
Tokyo stocks fell 1.23 per cent after a three-day holiday. The Nikkei 225 index ended 239.64 points lower at 19,291.99, while the Topix index of all first-section issues was down 0.69 per cent, or 10.97 points, to 1,574.64.
Sydney fell for the third straight day, finishing 46.5 points, or 0.82 per cent, lower to 5,645.7 as mining stocks slipped despite recent gains in commodity prices.
South Korean shares fell 0.65 per cent or 13.58 points to close at 2,091.00 on heavy foreign selling, and Hong Kong ended 1.27 per cent lower.
Mainland Chinese markets took a dive on worries regulators may tighten control over margin trading, a practice which allows investors to trade with borrowed money.
The China Securities Regulatory Commission on Thursday initially denied the reports on its official microblog, but later removed the statement.
The benchmark Shanghai Composite Index tumbled 2.77 per cent, or 117.06 points, to 4,112.21 on turnover of 540.2 billion yuan (US$88.4 billion).
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, fell 1.15 per cent, or 25.41 points, to 2,181.30 on turnover of 427.0 billion yuan.
Fresh US data was relatively weak. Non-farm productivity fell 1.9 per cent in the first quarter year-on-year in the second straight quarterly fall.
Payroll firm ADP meanwhile reported the US added just 169,000 private-sector jobs in April, the second month in a row under 200,000, as the oil sector downturn continued to pinch the labour market.
The figures came ahead of Friday’s highly anticipated Labor Department jobs report.
“The US economy was expected to bottom out in March and recover in the second quarter, but so far the figures for April have been poor,” Mitsushige Akino, executive officer at Ichiyoshi Asset Management in Tokyo, told Bloomberg News.
“Sentiment could sour even more depending on the April payrolls report. Risk-off moves could intensify if the US economic situation is deemed weak.”
US OVERHEATING?
Sentiment also took a hit as Yellen warned that US stock markets were at risk of overheating.
“There are potential dangers there,” she told a conference, but added there was no rapid credit growth and “no signs of a financial bubble.” “I believe we are better positioned now” to see risks, Yellen added.
The comments helped to dampen investors’ spirits with the Dow Jones Industrial Average falling 0.48 per cent, while the S&P 500 was down 0.45 per cent and the Nasdaq Composite Index lost 0.40 per cent.
Investors were also keeping a close eye on the tense situation in cash-strapped Greece, after the European Union and International Monetary Fund hit back Wednesday at accusations by Athens that internal rifts were blocking a bailout deal.
Oil prices fell in Asia Thursday as dealers fretted over a lower-than-expected drop in US crude production that dimmed hopes of a quick end to a global supply glut, analysts said.
US benchmark West Texas Intermediate for June delivery fell 35 cents to $60.58 while Brent crude for June eased 36 cents to US$67.41 in afternoon trade.
In currency markets, the dollar notched up modest gains after dropping sharply in New York on the weak US data, which raised more questions about whether a Fed interest rate hike would be pushed back.
In Tokyo afternoon trading, the greenback fetched ¥119.49, slightly up from ¥119.44 in New York.
The euro was mixed at US$1.1343 and ¥135.60, compared with US$1.1348 and ¥135.54 in US trade, as traders keep a close eye on tense Greek bailout talks.
Gold fetched US$1,183.36 against US$1,189.70 late on Wednesday.
In other markets:
– Malaysia’s main stock index slipped 0.87 per cent, or 15.87 points, to close on 1,805.10.
Petronas Gas rose 0.62 per cent to end at 22.88 ringgit, but Hong Leong Financial Group fell 2.87 per cent to 16.26 ringgit, while PPB Group lost 2.82 per cent, closing at 15.16 ringgit.
– Mumbai fell 0.44 per cent, or 118.26 points, to end at 26,599.11.
Axis Bank fell 2.95 per cent to 527.60 rupees, while IT major Tata Consultancy Services rose 3.27 per cent to 2,543.30 rupees.
– Bangkok dropped 1.42 per cent, or 21.57 points, to 1,498.31.
Supermarket operator Big C Supercenter slid 2.69 per cent to 217.00 baht, while telecoms company Advanced Info Service lost 2.07 per cent to 237.00 baht.
– Jakarta ended down 0.67 per cent, or 34.46 points, at 5,150.49.
State-owned Bank Negara Indonesia gained 2.29 per cent to 6,700 rupiah, while Indonesian automotive company Astra International slipped 2.04 per cent to 7,200 rupiah.
– Singapore closed down 0.78 per cent, or 27.01 points, to 3,482.70.
Real estate developer Capitaland fell 4.26 per cent to S$3.60 while Singapore Telecom eased 0.92 per cent to S$4.30.
– Philippine shares closed 0.73 per cent, or 57.37 points, lower at 7,816.27.
Bank of the Philippine Islands closed 1.37 per cent lower to 100.60 pesos, BDO Unibank closed 0.63 per cent lower to 110.30 pesos while Universal Robina was down 2.02 per cent to 213.60 pesos.
– In Wellington, the benchmark NZX 50 index fell 35.92 points or 0.62 per cent to 5,729.35. Contact Energy slipped 0.54 per cent to NZ$5.52 and Spark was down 2.70 per cent at NZ$2.88.
– Taiwan’s weighted index shed 114.09 points, or 1.16 per cent to 9,704.11.
Taiwan Semiconductor Manufacturing Co closed 0.68 per cent lower at NT$146.5 while Fubon Financial Holding fell 2.87 per cent to NT$64.4.
- AFP/ec
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