Asian stocks stumbled Tuesday, in line with a sharp pullback in commodities and a fall in many regional currencies against the U.S. dollar, as investors turned wary ahead of the U.S. Federal Reserve’s monetary-policy decision Wednesday.
The Nikkei 225 Index slumped 113.27 points, or 1.2%, to 9,558.69
Hong Kong’s Hang Seng Index tripped 130.93 points, or 0.5%, to 24,007.40
Tokyo shares were dragged down as weak earnings reports from corporations such as Nintendo Co. mounted the selling pressure, while stocks in Hong Kong were hurt by a decline in resource shares and concerns that Beijing’s policy tightening has yet to run its course.
Investors were focused on the Fed’s policy decision and Chairman Ben Bernanke’s news conference for updates on the central bank’s quantitative easing, known as QE2.
The $600-billion U.S. asset-purchase program, launched last year to spur the U.S. economy, has boosted liquidity and supported investor risk appetite in global markets, many analysts have said. QE2 is scheduled to end in June.
Citigroup strategists wrote in a note to clients Tuesday that for Asia, the biggest threat from an end of QE2 is a stronger U.S. dollar. In the past, "when the U.S. dollar has been strong, Asian equities have been weak," they said.
Several resource-sector stocks fell as gold and silver prices retreated after a solid recent rally, with crude-oil and base metals also pulling back on caution ahead of the FOMC decision.
Gold miner Zijin Mining Group Co. gave up 1.2%, PetroChina Co. lost 1.9% and Jiangxi Copper Co. shed 0.4% in Hong Kong; in Shanghai, they fell 3%, 0.5% and 2.7%, respectively.
Elsewhere, Japan Petroleum Exploration Co. dropped 1.4% and Korea Zinc Co. tumbled 6.2%. Shares of Minmetals Resources Ltd. tumbled 9.1% in Hong Kong after the company said it had decided not to pursue its $6.5 billion takeover bid for Equinox Minerals.
The ill-effects of the March 11 natural disasters and weak earnings from Japan’s Nintendo and Nidec Corp. drove the Tokyo market sharply lower.
Nidec fell 2.1% after the maker of precision motors for hard drives and automotive systems forecast a fall in operating profit for the current fiscal year.
Game-related stocks were also lower after Nintendo said profit fell for a second year. Nintendo lost 1.3%, while rival Capcom Co. fell 1.5%. Sony Corp., both a game-maker and a major exporter, lost 2.1%.
Automakers lost ground after credit-rating firm Standard & Poor’s cut its outlook on quake-hit Japanese auto makers Monday.
The lowered outlook came after domestic automobile production plummeted by more than half in March due to supply-chain disruptions. Auto makers are now expected to provide grim forecasts for the current fiscal year, which started this month. Toyota dropped 1.6%.
Barrick Gold Corp. has launched a $7.65-billion U.S. offer for Equinox.
The drop in Hong Kong came as trading resumed after a holiday-extended four-day weekend. Several Chinese property developers lost ground on worries that Beijing may launch more measures to cool the housing market.
China Overseas Land & Investment Ltd. fell 2.2% and Agile Property Holdings Ltd. dropped 1.9%.
The euro was recently fetching $1.4624 compared with $1.4579 late Monday in New York, rising sharply from the day’s lows. It was also buying 119.51 yen versus ¥119.25. The dollar was at ¥81.72, compared with ¥81.81.
CHINA
On Chinese bourses, where property shares were among those that dropped in the previous two sessions on such concerns, the performance was mixed.
Shanghai’s CSI 300 Composite Index slid 18.61 points, or 0.6%, to 3,230.96
Gemdale Corp. fell 0.9% and China Vanke Co. rose 0.4%.
Chinese stocks ended lower, however, as sentiment was dented by a report from the state-run China Securities Journal Tuesday that the authorities had finished initial rules for an international board.
There was concern that the planned board -- which forms part of Beijing’s efforts to internationalize its currency by allowing foreign firms to issue shares denominated in the yuan and help Shanghai become a global financial hub by 2020 -- may divert funds away from the main board.
In other markets;
Korea’s Kospi Index dropped 9.70 points, or 0.4%, to 2,206.30
Taiwan’s Taiex Index settled 2.61 points to 8,948.14
Singapore’s Straits Times Index dipped 15.89 points, or 0.2%, to 3,187.72
New Zealand’s NZX 50 fell 5.91 points, or 0.2%, to 3,486.48, while markets in Australia had the day off
