Asian shares staged a broad retreat on Thursday, with Italy due to auction more debt, Spain under the threat of more downgrades, and weekend elections in Greece looming.
Japan’s Nikkei 225 Index shed 18.95 points, or 0.2%, to 8,568.89
The Hang Seng Index in Hong Kong plummeted 218.12 points, or 1.2%, to 18,808.40
The losses for Asian stocks followed a retreat in the U.S. markets Wednesday, with investors parsing weaker retail-sales data and increasingly nervous ahead of elections in Greece on Sunday that may lead to the country exiting the European currency union.
Late Wednesday, Moody’s Investors Service added to anxiety about Europe’s wider debt troubles by downgrading Spain’s sovereign-debt rating to Baa3 from A3, while placing the country on review for a possible further downgrade.
Moody’s said it made the move following last weekend’s announcement that Spain will borrow up to 100 billion euros ($126 billion U.S.) to support its banking sector, coupled with the country’s limited financial-market access and increasingly vulnerable economy.
The downgrade by Moody’s followed a similar move earlier Wednesday from Egan-Jones, which lowered its rating on Spain to CCC+ from B. On Wednesday, yields on Spain’s 10-year note pushed past 6.75%.
Meanwhile Italy, Europe’s third-largest economy, will hold a key bond auction later in the global trading day, and investors are hoping that strong demand for Italian debt will soothe fears that it will be the next country to join Europe’s debt casualty list
Globally exposed technology companies fell in Japan on Thursday, with Toshiba Corp. down 1.7%, and Alps Electric Co. falling 1.8%.
Other exporters under pressure included car maker Toyota Motor Corp. down 1.2% and Nissan Motor Co. down 0.7%.
Shares of Esprit Holdings Ltd. plummeted another 12.4% on Hong Kong, with the Europe-focused apparel firm falling sharply for the second consecutive day in the wake of the surprise resignations of its chief executive and chairman for personal reasons.
Conglomerate Hutchison Whampoa Ltd. dropped 1.4%, while supply and logistics firm Li & Fung Ltd. fell 2.8%.
In Seoul, LG Electronics Inc. dropped 2.9%, and LG Display Co. fell 1.8%.
Among gainers, shares of Renesas Electronics Corp. rallied 14.9% after a Mainichi Shimbun report that it was in talks with banks to secure up to ¥50 billion ($630 million U.S.) in loans.
Over in Australia, deal speculation provided some support, with fund manager Perpetual Ltd. up 9.9% after the Australian Financial Review reported that the firm may be about to get its second private-equity approach in two years.
However, energy and material-sector firms weighed in Sydney, with Aquarius Platinum Ltd. dropping 3.1% and Oil Search Ltd. down 1.5%.
In other markets
Shanghai’s CSI 300 Composite Index sifted off 20.22 points, or 0.8%, to 2,560.42
Korea’s Kospi Index added 12.16 points, or 0.7%, to 1,871.48
Singapore's Straits Times Index dropped 13.07 points, or 0.5%, to 2,773.81
Taiwan’s Taiex Index descended 13.73 points, or 0.2%, to 7,075.10
New Zealand’s NZX index added 34.36 points, or 1%, to 3,416.09
Australia’s ASX Index dipped 21.55 points, or 0.5%, to 4,042.24
