Asian shares fell sharply Thursday, with investors reacting badly to the U.S. Federal Reserve policy decision and downbeat view on economic growth, as well as some weak data from China during the session.
In Tokyo, the Nikkei 225 Index tumbled 180.90 points, or 2.1%, to 8,560.26
In Hong Kong, the Hang Seng Index collapsed 912.22 points, or 4.9%, to 17,911.90
As expected, the Fed announced its plan to buy long-dated Treasury securities and sell the same amount of securities with shorter maturities, which it has called Operation Twist. But the central bank also cited "significant downside risks to the economic outlook," sending U.S. stocks into a tailspin Wednesday.
Bank shares were slammed in the U.S., as "the concern [is] that a still-flatter U.S. yield curve could further pressure financial stocks as it destroys bank profitability," according to strategists at BNP Paribas.
Losses for the financial sector spread to Asia, with Nomura Holdings Inc. down 4.8%, and Daiwa Securities Group Inc. losing 4.4% in Tokyo.
Likewise, Macquarie Group Ltd. gave up 3.8% in Sydney and insurer AMP Ltd fell 2.8%.
Hong Kong-listed Agricultural Bank of China Ltd. skidded 7.7%, while Industrial & Commercial Bank of China Ltd. fell 7.6%.
Property stocks were also posting heavy losses in Hong Kong, with China Overseas Land & Investment Ltd. down 6.7%, and Agile Property Holdings Ltd. diving 14.8%.
On the Australian market, Rio Tinto Ltd. tumbled 6.5% and Fortescue Metals Group Ltd. dropped 6%.
Crude oil for November delivery slumped more than $3 to trade below $83 U.S. a barrel, while December gold dropped more than $45 to trade below $1,763 U.S. an ounce in electronic trading.
Commodities were hit by fears about growth and as the U.S. dollar garnered some support from the Federal Reserve’s policy measures.
Commodity prices and the dollar often move inversely, as most commodities are priced in U.S. dollars and can be viewed as less attractive as an asset class when the dollar strengthens.
Still, deal-making helped Australia’s Foster’s Group Ltd. jumped 7.6%, after the firm received a sweetened takeover proposal from foreign rival SABMiller PLC late Wednesday.
In Japan, KDDI Corp. gave up early gains to end 0.8% lower but still outperformed the broader market, while Softbank Corp. dropped 12.3% after reports that KDDI had secured rights to sell
Apple Inc.’s iPhone, previously the exclusive preserve of Softbank
CHINA
Weak Chinese data also weigh on those markets, as HSBC’s preliminary China Manufacturing Purchasing Managers’ index, or "flash" PMI, fell to a two-month low in September, indicating a broadening slowdown in the Chinese economy
Shanghai’s CSI 300 Composite Index slid 85.32 points, or 3.1%, to 2,720.53
In other markets;
Taiwan’s Taiex Index subtracted 230.38 points, or 3.1%, to 7,305.50
Korea’s Kospi Index dropped 53.73 points, or 2.9%, to 1,800.55
Singapore’s Straits Times Index stepped back 71.26 points, or 2.6%, to 2,720.53
New Zealand’s NZX 50 Index actually moved up 3.45 points, or 0.1%, to 3,312.28
Australia’s S&P/ASX 200 Index dumped 106.90 points, or 2.6%, to 3,964.90
