Asian shares finished lower Tuesday, with investors unsettled after Standard & Poor’s warned of possible ratings downgrades for much of the euro-zone.
Japan’s Nikkei 225 Index shed 120.82 points, or 1.4%, to 8,575.16.
In Hong Kong, the Hang Seng Index settled 237.46 points, or 1.2%, to 18,942.20.
Wall Street stocks ended higher Monday, but off their best levels of the day after reports -- only later confirmed -- that S&P had placed the sovereign ratings of 15 euro-zone countries on watch for a possible downgrade.
Positive European developments over the weekend and early Monday “were destroyed” by the S&P news, said strategists at BNP Paribas.
Hong Kong banks traded broadly weaker in the wake of S&P’s warning, with Agricultural Bank of China Ltd. receding 1.7%, and Bank of China Ltd. down 1.8%, while HSBC Holdings PLC declined 1% after the lender received a large fine by U.K. regulators over the sales of some securities to retail investors.
Most Japanese banks also lost ground, with Nomura Holdings Inc. and Mizuho Financial Group Inc. each retreating 1.9%.
The S&P warning came at the start of a week with many key events scheduled in Europe, including a European Union summit slated for Friday, as well as policy decisions due out from the European Central Bank and the Bank of England.
On Tuesday, the Reserve Bank of Australia cut its key cash rate by a quarter percentage point to 4.25%, the second time it has cut the rate in two months, with central bank Gov. Glenn Stevens citing the increased threat of a global slowdown.
Australian equities added to losses after the RBA announcement, and Nomura economist Stephen Roberts said the downbeat tone of Gov. Stevens’ comments carried more weight because they came with a rate cut.
As commodity futures lost ground in electronic trading, Australian miners gave back some of the gains they made in the previous session.
Rio Tinto Ltd. lost 2.2%, while gold miner Newcrest Mining Ltd. fell 4% after a downgrade to hold from buy at Deutsche Bank.
Metal-sector firms were also lower elsewhere, with Sumitomo Metal Mining Co. down down 1.8% and JFE Holdings Inc. pulling back 4.1% in Tokyo, and Jiangxi Copper Co. falling 3.1% and Angang Steel Co. down 3.8% in Hong Kong.
Hong Kong-listed Esprit Holdings Ltd. plunged 10.5% after its chief financial officer resigned for personal reasons amid a major ongoing restructuring of the company.
Many Hong Kong-listed property firms were weaker, with China Resources Land Ltd. down 2.5%, and China Overseas Land & Investment Ltd. off 5.8%.
The Credit Suisse analysts said Tuesday that they had maintained an underweight stance on the Chinese property sector, even after last week’s move to loosen monetary policy by the Chinese central bank.
CHINA
Shanghai’s CSI 300 index docked 5.04 points, or 0.2%, to 2,516.34
China’s top real-estate developer China Vanke Co. reported a 36% year-on-year sales drop in November. Still, Credit Suisse strategists said that the firm has already achieved 89% of its target for the year and that its leverage remains low.
China Vanke’s shares gained 2.2% on the Shenzhen bourse.
In other markets;
Taiwan’s Taiex Index doffed 141.80 points, or 2%, to 6,956.28
Korea’s Kospi Index jettisoned 20.08 points, or 1%, to 1,902.82
Singapore’s Straits Times Index dipped 16.99 points, or 0.6%, to 2,749.24
New Zealand’s NZX 50 Index slid 9.74 points, or 0.3%, to 3,291.49
Australia’s S&P/ASX 200 Index fell 59.30 points, or 1.4%, to 4,262
