Asian shares finished mostly lower Tuesday as investors turned cautious on concern that recent market gains were getting ahead of the pace of economic recovery.
Japan's Nikkei 225 slid 78.81 points, or 0.8% to 9,786.82, while Hong Kong's Hang Seng plunged another 194.90 points, or 1.1%, to 18,058.49, following Monday’s 400-plus-point decline.
"Asian markets were lower reflecting the growing concern that the rally is becoming inconsistent with the pace of the recovery," said Sanjay Mathur, non-Japan Asia chief economist at the Royal Bank of Scotland.
"Rising U.S. bond yields and commodity prices are progressively becoming additional headwinds to the valuation and earnings cycle."
Most shares also lost ground on the expectation that a slight market pullback of 10%-15% is "good for the market, overall, after an unprecedented 13-week consecutive climb," said Gabriel Yap, senior dealing director at DMG & Partners, pointing out that Asian markets are up 60%-65% from March lows over a period of three months.
Wall Street had ended little changed Monday offering little guidance for traders in Asia, but Texas Instruments climbed in after-hours trading after the chip giant boosted its second-quarter guidance.
Tech stocks in Asia were initially supported by TI's guidance lift, then followed the broader trend.
"Fear of mounting bank losses in Europe are making the rounds again," said McGonegal. Elpida Memory lost 3.5% in Tokyo and Samsung Electronics shed 1.7% in Seoul. But Pioneer closed up 12.7%, lifted by short-covering after a drop of more than 20% over the past month.
Shipping stocks continued their retreat as the Baltic Dry Index fell Monday for its third session in a row, giving back 4.3% and now down around 15% over three days. Japan's Nippon Yusen and Mitsui O.S.K. Lines each closed 2.2% lower. Daewoo Shipbuilding fell 3.1% in Korea, while
In Hong Kong, China Cosco fell 2.9%.
In Tokyo, Yaskawa Electric surged 7.8% after a Nikkei report said it had begun supplying Mazda Motor with a proprietary drive system for use in a hydrogen-powered hybrid car.
Human-plasma products producer CSL rose 5.2% in Sydney. The company said it would buy back up to 1.59 billion Australian dollars ($1.3 billion U.S.) of its stock in the next year, after ending its proposed $3.1-billion Talecris acquisition.
Resource stocks put pressure on the Australian and South Korean markets as a whole. BHP closed down 4.4%, Newcrest fell 3.3% and Bluescope lost 4.2% in Sydney, and over in Seoul, Hyundai Steel lost 2.7% and Korea Zinc fell 3.8%.
South Korea's producer prices fell for the first time in almost seven years in May as the won's gains against the dollar helped lower prices of industrial products, Bank of Korea data released Tuesday showed.
Property stocks pulled down the market in Hong Kong. KGI Asia's Ben Kwong said the sector had run ahead of fundamentals, with New World Development down 3.3% and Sino Land off 4.3%.
Shares in Taiwan dropped after a recent sharp run. "The fall is a technical pullback and not driven by news. Shares are likely to trend down this month," said SinoPac Securities Investment fund manager Harvey Chang. Paper and financial stocks ended lower.
In currency trading, the dollar was at 98.06 yen from 98.42 yen late Monday in New York. The euro was trading at 136.72 yen from 136.85 yen, and at $1.395 versus $1.388.
On Globex, June gold was down 10 cents from New York levels, at $951.60 U.S. an ounce while July crude-oil futures gained $1.04 to $69.13 U.S. a barrel, having fallen 35 cents in New York.
Elsewhere:
China’s Shanghai Composite Index eked out a gain of 12.08 points, or 0.4%, to 2,960.56
Singapore’s Straits Times Index picked up 16.17 points, or 0.7%, to 2,349.87
South Korea’s Kospi index lost 21.46 points, or 1.5% to 1,371.84
Taiwan’s Taiex stumbled 213.63 or 3.2%, to 6,414.39
New Zealand’s NZX 50 Index regained 5.79 points, or 0.2% to 2,822.40
Australia’s S&P/ASX 200 returned from holiday with a whimper, losing 36.30 points or 0.9% to 3,934.30.
