Asia-Pacific Markets – Asian shares hurt by sell-off

Asia-Pacific Markets – Asian shares hurt by sell-off

Steep losses concentrated in the commodity sector took the resource-heavy S&P ASX 200 index down to a two-year low on Tuesday, with the bourse settling below the 5,000-point support level.

Asian share markets came under intense selling pressure on Tuesday, with Japan’s Nikkei 225 index losing over 4 percent, following a steep retreat on Wall Street as below-view data intensified concerns about the health of China’s economy.

In the previous trading session, official data showed profits earned by Chinese industrial companies fell 8.8 percent in August from a year earlier, underscoring persistent signs of headwinds in the world’s second-biggest economy.

“[The sell-off today] is all about China,” ING Financial Markets’ head of research for Asia, Tim Condon, told CNBC. “The number yesterday has rekindled worries and [alongside the] weak data [in the U.S. overnight,] people thought that maybe what’s happening in China is spilling over into the U.S.”

Market bellwether BHP Billiton crashed 6.7 percent to its lowest level since November 2008, while rival Rio Tinto and Fortescue Metals plunged 4.6 and 6.5 percent respectively.

Alumina tanked 4.6 percent on the back of news that Alcoa Metals is splitting into two publicly traded entities.

Oil and gas related plays were also battered; Santos skidded 9.1 percent, while Woodside Petroleum and Oil Search closed down 5.8 and 3.5 percent respectively.

All four major lenders plunged nearly 4 percent each. Meanwhile, Qantas Airways fell 2.1 percent after investment research firm Morningstar cuts its rating for the stock to “reduce” from “hold.”

Nikkei skids 4.1%

The Nikkei index at the Tokyo Stock Exchange fell through the 17,000 level as selling intensified in the final hour of trading, and eventually settled at its lowest level since January 23.

Traders dumped companies with exposure to China, such as Kobe Steel which slumped 11.1 percent after the steelmaker cut its full-year profit target due to lagging demand from a slower-growing China and weaker metal prices. JFE Holdings and Nisshin Steel closed down about 7 percent each, while construction equipment maker Komatsu retreated 3.9 percent.

Energy producers JX Holdings and Inpex ended nearly 5 percent lower each, as crude oil prices hovered near the flatline in Asian trade.

Meanwhile, shares of Daiichi Chuo Kisen Kaisha were halted following a report by the Nikkei business daily that the bulk carrier is planning to file for protection from creditors as early as Tuesday amid a global commodities slump. The report took a toll on other maritime firms, with Nippon Yusen Kabushiki Kaisha, Mitsui OSK Lines and Kawasaki Kisen Kaisha down between 4.4 and 7.4 percent.

Index heavyweight SoftBank was the biggest loser in the telecommunication sector, down 6.4 percent at a more than two-year trough following news that fellow Alibaba shareholder Yahoo is set to spin off its 15 percent stake.

Commodity shares were among the biggest casualties as fears of weaker Chinese demand sent prices of commodities tumbling. Further adding to the ‘risk-off’ sentiment was the near 30 percent slump in the London-listed shares of commodities and mining behemoth Glencore on Monday.

Read MoreShould you fear a ‘Glencore’ moment?

Commodity-linked currencies also lost their footing, with the Australian dollar and the New Zealand dollar dropping 0.6 and 0.4 percent respectively against the U.S. dollar in Tuesday’s Asian trade.

“Markets were shaken by the sell-off in Glencore shares as investment analysts started to focus on the extent of the company’s debt amid a sustained downturn in commodity prices,” Mizuho analysts wrote in a note issued earlier in the trading session.

Major U.S. averages closed sharply lower overnight, with the tech-heavy Nasdaq Composite leading losses with 3 percent slump. The Dow Jones Industrial Average lost 1.9 percent, while the S&P 500 tumbled 2.6 percent to fall below the psychologically key level of 1,900 for the first time since August 26.

 

Symbol
Name
Price
Change
%Change
NIKKEI Nikkei 225 Index 16930.84
-714.27 -4.05%
HSI Hang Seng Index 20556.60
-629.72 -2.97%
ASX 200 S&P/ASX 200 4918.43
-195.07 -3.81%
SHANGHAI Shanghai Composite Index 3036.77
-63.98 -2.06%
KOSPI KOSPI Index 1942.85
-4.25 -0.22%
CNBC 100 CNBC 100 ASIA IDX 6014.64
-192.04 -3.09
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