Asia stocks were hit Monday by a string of negative global developments, including a disappointing U.S. jobs report and weekend comments from Premier Wen Jiabao highlighting economic pressures on China.
Japan’s Nikkei 225 Index jettisoned 123.87 points, or 1.4%, to close Monday at 8,896.88
The Hang Seng Index in Hong Kong tumbled 372.55 points, or 1.9%, to 19,428.09
The day’s weakness followed a disappointing U.S. non-farm payroll report for June, that sent risk assets tumbling on Friday.
Indicators from Japan also highlighted similar signs of weakness, with data out on Monday revealing a smaller-than-expected current-account surplus and a surprisingly sharp drop in core machinery orders.
In Hong Kong, gambling, ports and resource were thrashed amid Chinese growth concerns, with Sands China Ltd. dropping 4.9%, Cosco Pacific Ltd. shed 4.3% and China Coal Energy Co. declined 4.1%.
Machinery sector stocks tumbled in Tokyo after the day’s downbeat economic data, with Fanuc Corp. losing 3.6% and Hitachi Construction Machinery Co. losing 4.3%, while Komatsu Ltd. shed 4%.
Shares of Angang Steel Co. shed 5.6% in Hong Kong and 2.9% in Shenzhen after the company issued a loss warning for the first half of the year due to a drop in steel prices.
Exporters led the declines in early Tokyo trading, with a stronger yen — particularly against the euro. which traded well below the ¥98 level Monday — providing an additional headwind.
Sony Corp. lost 2%, Honda Motor Co. shed 3.1% and Mazda Motor Corp. declined 3.9%.
Shares of index heavyweight Fast Retailing Co. dropped 2.5% after it cut its fiscal-year profit outlook, citing weakness in domestic sales.
In South Korea, losses for the key shipbuilding sector dragged on the Seoul market. Hyundai Heavy Industries Co. dropped 1.5% and Daewoo Shipbuilding & Marine Engineering Co. gave up 4.9%.
Resource shares came under selling pressure in Sydney, after heavy declines for commodity futures on Friday.
Diversified miners BHP Billiton Ltd. and Rio Tinto Ltd. lost 1.9% and 2.2%, respectively, while gold producer Newcrest Mining Ltd. declined 2.9%.
Stock in Iluka Resources Ltd. plunged 24.1% after the Australian mineral-sands producer cut its full-year sales guidance, following soft demand for materials such as zircon and rutile.
However, some construction-tied firms outperformed.
Shares of Lend Lease Group slipped 0.1%, less than the broad market, after the property developer secured two billion Australian dollars ($2.04 billion U.S.) in funding from investors for the first of two commercial office towers at a major urban redevelopment in Sydney.
CHINA
Chinese equities’ slump came after Premier Wen said over the weekend that real-estate market curbs in place to discourage speculation were a long-term policy. He added that while economic growth was broadly stable, there is still a
"huge pressure to go downward."
Shanghai’s CSI 300 index dipped 56.58 points, or 2.3%, to 2,416.04
Also Monday, government data showed the rate of increase in consumer prices slowed to 2.2% in June from a year earlier, compared with a 3% rise in May. Analysts said cooling inflation could prompt more monetary easing from Beijing, but the remarks failed to lift investor sentiment.
Financial, resource and automobile stocks got hammered on mainland bourses.
Shares of Pingdingshan Tianan Coal Mining Co. slumped 6.7%, Anhui Jianghuai Automobile Co. stumbled 6.1%, refining giant China Petroleum & Chemical Corp. slid 4.6% and China Merchants Bank Corp. sank 4% in Shanghai.
In Shenzhen, construction-related stocks were hit hard, with Xinjiang Tianshan Cement Co. dropping by the day’s 10% limit and Cofco Property Group Co. shed 5.6%, while FAW Car Co. gave up 6.1%.
China Overseas Land & Investment Ltd. sank 3.2%, and Sino Land Co. lost 2.8%, while Hong Kong-focused Hang Lung Properties Ltd. traded down 2.8%.
However, property names traded mostly higher on the mainland Chinese bourses, ignoring Wen’s remarks to instead extend a rally from Friday, in the wake of the Chinese central bank’s surprise interest-rate cut late Thursday.
In other markets
Korea’s Kospi Index fell 22.07 points, or 1.2%, to 1,836.13
Singapore's Straits Times Index slid 49.47 points, or 1.7%, to 2,928.08
Taiwan’s Taiex Index slipped 58.63 points, or 0.8%, to 7,309.06
New Zealand’s NZX index poked up 1.49 points to 3,480.19
Australia’s ASX Index lost 39.54 points, or 1%, to 4,118.27
