Asian markets fell Thursday with Tokyo plunging more than seven percent as investors took profits after weak Chinese data and signs the US Federal Reserve could start tapering off its massive stimulus measures.
Tokyo dropped in the afternoon after HSBC said manufacturing activity in China contracted in May for the first time in seven months, in another sign of the weakness of recovery in the world’s second-largest economy.
Markets also took their lead from Wall Street, where stocks fell after Federal Reserve chief Ben Bernanke told Congress the Fed could scale back stimulus measures soon if economic conditions improved.
Tokyo closed down 7.32 percent, or 1,143.28 points, at 14,483.98, after gaining in the morning.
Sydney slumped 1.99 percent, or 106.9 points, to close at 5,062.4. South Korean shares slid 1.24 percent, or 24.64 points, to finish at 1,969.19.
In afternoon trade Shanghai was down 0.75 percent and Hong Kong was down 2.49 percent.
“The negative Chinese indicator triggered today’s selling,” said Hirokazu Fujikiki, strategist with Okasan Securities in Japan. “It was no wonder if sizeable selling could emerge as Japanese shares rose quite fast recently.”
Earlier in the day, the Nikkei 225 index at the Tokyo Stock Exchange, which closed at its best level in more than five years on Wednesday, had risen 0.23 percent, bucking the decline in New York the previous day.
Other markets had opened down, taking their lead from Wall Street where the Dow Jones Industrial Average dropped 0.52 percent to 15,307.17 after Bernanke’s comments.
He stressed that current economic conditions did not warrant an end to the Fed’s aggressive stimulus measures, and US stocks had rallied during the early part of his highly anticipated testimony.
But he told lawmakers the Fed could start reducing its $85 billion-a-month bond-buying programme at one of the next few meetings. And stocks took a decisive lurch with the release of Federal Reserve meeting minutes that showed some officials had discussed curtailing bond purchases as soon as June.
“Fed Chairman Bernanke’s remarks caused jitters among global investors,” said Peng Yunliang at Shanghai Securities.
The dollar was down against the yen in Asia, fetching 101.70 against 103.31 yen late Wednesday in New York.
The euro was at 130.41 yen from 132.58 yen and $1.2829 from $1.2855.
Oil extended its losses in Asian trade, with New York’s main contract, light sweet crude for delivery in July, dropping 63 cents to $93.65 a barrel in the afternoon. Brent North Sea crude for July delivery shed 60 cents to $102.00.
In other markets:
– Taipei shed 1.92 percent, or 161.01 points, to 8,237.83.
Taiwan Semiconductor Manufacturing Co fell 3.57 percent to Tw$108.0 while leading integrated chip design house MediaTek lost 3.14 percent to Tw$370.0.
– Wellington fell 0.47 percent, or 21.59 points, to 4,588.59.
Telecom Corp was down 1.04 percent at NZ$2.375, Contact Energy was off 1.2 percent at NZ$5.20 and Fletcher Building was up 0.71 percent at NZ$8.49.
– Dow Jones Newswires contributed to this report –
Tokyo plunges more than 7% as Asian markets fall
