(AP) Asia stocks slump on US job growth worries
By PAMELA SAMPSON
AP Business Writer
Asian stock markets followed Wall Street into negative territory Wednesday after the U.S. Federal Reserve voiced concern about U.S. job growth but appeared to refrain from taking steps to prop up the economy.
Benchmark oil fell below $104 per barrel while the dollar rose against the euro but fell against the yen.
Japan’s Nikkei 225 index fell 1.4 percent to 9,910.84 after briefly slipping to its lowest level in a month at 9,886.34.
South Korea’s Kospi dropped 0.9 percent to 2,030.90 and Australia’s S&P/ASX 200 lost 0.3 percent to 4,324.60.
Markets in mainland China, Hong Kong and Taiwan were closed for public holidays.
Minutes released Tuesday from the March meeting of the Fed’s Open Market Committee, which sets interest rates, showed policymakers fear hiring could slow if economic growth doesn’t improve. That caused Wall Street stocks to slump.
The minutes also did not address the logistics of more bond-buying _ troubling to traders who have been hoping for more Fed action.
The Fed has embarked on two previous rounds of bond-buying, most recently in August 2010, to drive down long-term interest rates. Low bond yields generally encourage investors to shift money to buying stocks.
Analysts had different expectations for China, where sluggish manufacturing and export demand have prompted speculation of further efforts to stimulate the economy.
China faces a challenge in keeping growth from stalling while avoiding an inflationary rebound. Economic growth declined to 8.9 percent in the final quarter of last year after Beijing hiked interest rates and tightened other controls to cool inflation.
Chinese leaders reversed course in December and promised more bank lending to help companies cope with the slump in global demand, but changes have been gradual.
Dariusz Kowalczyk, senior economist at Credit Agricole CIB in Hong Kong, said in an e-mail that he expects policy easing “in the near term” in the form of cuts in either the lending rate or the level of reserves banks are required to hold.
South Korean industrial shares were in sharp decline. Steelmaker POSCO fell 2.5 percent while Hyundai Heavy Industries Co., a leading shipbuilder, plunged 3.7 percent. Doosan Heavy Industries & Construction shed 2.3 percent.
Newcrest Mining Ltd., a leading Australian gold miner, fell 2 percent on tumbling gold prices. Japan’s Fast Retailing Co. plummeted 4.9 percent.
On Wall Street, the Dow Jones industrial average closed down 0.5 percent at 13,199.55. The Standard & Poor’s 500 index finished down 0.4 percent at 1,413.38. The Nasdaq composite index lost 0.2 percent to 3,113.57.
Benchmark oil for May delivery was down 44 cents to $103.56 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.22 to settle at $104.01 per barrel in New York on Tuesday.
In currencies, the euro fell to $1.3190 from $1.3217 late Tuesday in New York. The dollar fell to 82.66 yen from 82.86 yen.
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