Asia stock markets fell Wednesday, giving up some of the strong gains from the previous session, as hopes for an aggressive stimulus spending in China faltered, and as more trouble in Spain posed fresh threats to the euro-zone.
Japan’s Nikkei 225 Index sifted off 23.89 points, or 0.3%, to 8,633.19
The Hang Seng Index in Hong Kong collapsed 365.24 points, or 1.9%, to 18,690.22
Financials slumped in Hong Kong, with Bank of Communications Co. down 1.4% and China Life Insurance Co. losing 1.9%.
Hong Kong-listed property firms also suffered, with Sino Land Co. down 1.8% and Sun Hung Kai Properties Ltd. losing 1.6%.
Chinese stimulus concerns added to existing offshore worries weighing on sentiment in Asia.
More credit rating downgrades for Spain and a Financial Times report that the European Central Bank rejected the nation’s bank-recapitalization plans highlighted distress in the euro-zone and pressured the common currency.
Weakness for the euro weighed on some leading exporters in Tokyo, as Sony Corp. traded down 1.9%, Toshiba Corp. lost 1.7%, and Sharp Corp. slumped 3%.
NEC Corp. took a 2.6% drop, with the firm set to buy the IT operations of Australia’s CSG Ltd. CSG shares surged 18.4% in Sydney.
Technology firms were also weak in Seoul, where Samsung Electronics Co. retreated 1% and LG Electronics Inc. dropped 0.9%.
On the upside, stock in Olympus Corp. climbed 4% following an Asahi Shimbun report that the firm is in talks to form a capital alliance with Panasonic Corp. or Sony to help shore up its balance sheet. Panasonic shares surrendered 2.2%.
Renesas Electronics Corp. remained in focus — and shares soared 27.5% — after Dow Jones Newswires cited the company as saying reports of a major restructuring were "sensational" in nature.
Stock in resource firms dragged across the region as commodity prices eased overnight.
Diversified Citic Pacific Ltd., which has a presence in iron ore mining, slumped 1.8% in Hong Kong, while in Sydney, diversified miner Rio Tinto Ltd. gave up 1.4%.
Australian gold producer Newcrest Mining Ltd. slumped 2.3% after a sharp drop in gold futures in New York overnight.
Energy firms also came under selling pressure after crude-oil futures traded below $91 a barrel in electronic trading.
Tokyo-listed JX Holdings Inc. declined 2.2%, while Hong Kong-traded shares of Cnooc Ltd. dropped 1.7%, and Sydney-listed Santos Ltd. gave up 1.3%.
Still in Australia, shares of Wesfarmers Ltd. eased 0.2% as investors reacted to a sales and strategy update from the conglomerate, which cited a challenging market environment for its Officeworks chain.
Also dragging on Australian retailers, government data showed the country’s retail sales disappointed with a 0.2% drop in April.
CHINA
Optimism about Chinese stimulus measures to power the economy took a hit after a state media report suggested the package will be relatively mild, compared to actions taken at the height of the global financial crisis, in late 2008.
Shanghai’s CSI 300 Composite Index subtracted 8.60 points, or 0.3%, to 2,642.26
However, property shares listed on mainland bourses moved in an upward direction, with Gemdale Corp. rising 1% in Shanghai and China Vanke Co. up 0.4% in Shenzhen.
In other markets;
Korea’s Kospi Index lost 5.05 points, or 0.3%, to 1,844.86
Singapore's Straits Times Index backtracked 17.90 points, or 0.6%, to 2,787.95
Taiwan’s Taiex Index demurred 80.49 points, or 1.1%, to 7,261.80
New Zealand’s NXZ Index bucked the trend and gained 3.05 points, or 0.1%, to 3,481.34
Australia’s ASX Index doffed 20.18 points, or 0.5%, to 4,094.23
