Asia markets declined Wednesday after struggling to hold early gains, with investor tolerance for risk assets evaporating after Moody’s downgrade of Japan’s credit ratings brought back worries related to sovereign debt and the global economic outlook.
In Japan, the Nikkei 225 average surrendered 93.40 points, or 1.1%, to 8,639.61
Hong Kong’s Hang Seng Index erased 408.74 points, or 2.1%, to 19,466.80
Financial stocks lost ground in Tokyo, while the Hong Kong market was pulled lower as China Life Insurance Co. dived after reporting downbeat earnings. The performance in Tokyo came as Moody’s cut the nation’s debt ratings by one notch to AA3 from AA2 with a stable outlook, citing wide budget deficits and burgeoning debt since 2009.
In Tokyo, shares of Mitsubishi UFJ Financial Group Inc. skidded 2.9%, Sumitomo Mitsui Financial Group Inc. dropped 1.8% and Dai-ichi Life Insurance Co. fell 0.8%.
The yen remained firm against the U.S. dollar despite Moody’s downgrade and fresh moves unveiled by Finance Minister Yoshihiko Noda to curb the currency’s strength.
Many exporters declined, with Sony Corp. falling 2.9% and Toyota Motor Corp. shrinking 1.6%.
Analysts continued to look forward to Friday’s speech at Jackson Hole from U.S. Federal Reserve Chairman Ben Bernanke. But economists at Citigroup said they don’t expect him to signal that another round of quantitative easing, widely being referred to as QE3 -- a matter of much speculation recently -- is imminent.
Some even questioned how effective a fresh round of asset purchases from the Fed could be.
Meanwhile, shares in Hong Kong were pressured by a steep fall in shares of China Life, which dropped nearly 12% after the insurer’s first-half profit fell way short of analyst estimates; in Shanghai, they fell 3.3%.
The result also dragged down Ping An Insurance Group Co., with the stock shedding 3.7% in Hong Kong and 0.9% in Shanghai.
In Sydney trading, results helped support the market, with insurance firm Suncorp Group Ltd. climbing 5.6% after reporting that net income fell but nonetheless beat analyst expectations.
The choppy stock performance in the Asian region came despite a solid rally on Wall Street overnight, after a business-activity index slid in August, but not by as much as a similar index released last week. In addition, global manufacturing surveys weren’t bad as some had expected.
Shares of Hyundai Motor Co. rose 1.4% in Seoul, on top of the double-digit performance gains recorded in the previous session. The stock was aided by Credit Suisse’s upgrade to outperform from neutral.
In other markets;
Shanghai’s CSI 300 Index dropped 10.99 points, or 0.4%, to 2,810.02
Korea’s Kospi Index docked 21.90 points, or 1.2%, to 1,754.78
Taiwan’s Taiex Index fell 47.30 points, or 0.6%, to 7,502.93
Singapore’s Straits Times Index lopped off 45.25 points, or 1.6%, to 2,719.90
New Zealand’s NZX 50 Index slipped 6.88 points, or 0.2%, to 3,287.52
Australia’s S&P/ASX 200 Index backtracked 5.80 points, or 0.1%, to 4,167.60
