Japanese stocks swooned in volatile trading action Wednesday after Prime Minister Shinzo Abe’s blueprint to spur long-term economic growth fell short of expectations.
The Nikkei 225 plummeted 518.89 points, or 3.8%, to 13,014.89
In Hong Kong, the Hang Seng Index settled 216.28 points, or 1%, to 22,069.24
Most other regional markets declined after a weak lead from Wall Street overnight that kept alive concerns the Federal Reserve may taper its bond purchases, with Australian stocks sliding after the nation’s first-quarter growth came in below estimates.
In Japan, the Nikkei rose more than 1% as Abe began his much-anticipated speech, but staged a swift reversal within minutes before ending the session much lower. The decline was the fifth time in the last two weeks when the Nikkei fell more than 3% in a single day.
The U.S. dollar also charted a similarly volatile course, rising as high as ¥100.45 before sliding back to ¥99.57 by the time the stock market closed.
The selloff came as Abe’s blueprint revealed plans to attract foreign funds, boost investment and wages, and revamp the structure of agricultural land. He also announced a proposal to allow the nation’s massive pension funds to increase their equity allocation.
Power utilities dived as Abe pledged to restart shuttered nuclear plants in the country after ensuring their safety. He also announced plans to liberalize the retail electricity market, separate the distribution and transmission businesses, and boost capital spending in utilities.
Tokyo Electric Power Co. plunged 16.3%, Tohoku Electric Power Co. slumped 9.1% and Kansai Electric Power Co. plummeted 9.2%.
Several exporters took a beating on the yen’s strength. Mitsubishi Motors Corp. skidded 5.7%, Fast Retailing Co. sank 9.5%, Trend Micro Inc. lost 8.2% and Sharp Corp. gave up 7.3%.
Sony Corp. lost 5%, failing to benefit from a Nikkei newspaper report that it plans to begin selling e-books for Apple Inc.’s iPad and iPhone in Japan, starting as early as the second half of the current financial year.
Property stocks led the losses in Hong Kong, with Cheung Kong Holdings Ltd. sliding 2.8% and New World Development Co. falling 2.2%.
Meanwhile, Australia’s S&P/ASX 200 extended losses in afternoon trading after data showed the domestic economy expanded at a slower-than-expected rate during the January-March quarter.
Commonwealth Bank of Australia was off 1.3%, and Westpac Banking Corp. fell 2.6%.
Shares of Fortescue Metals Group Ltd. rose 2.6% after an increase in iron-ore prices.
South Korean exporters also lost ground on weak cues from Wall Street, with Hyundai Motor Co. retreating 2.1% and Kia Motors Corp shedding 2.3%.
Samsung Electronics Co. fell 1.2% in a downbeat market, although the U.S. International Trade Commission ruled in favour of the company, and against Apple, in a patent dispute affecting older iPhone and iPad models.
CHINA
In Shanghai, the CSI 300 Index dropped 5.13 points, or 0.2%, to 2,560.24
Data released by HSBC earlier in the day showed activity in China’s services sector remained at sluggish levels, with the headline Purchasing Managers’ Index edging marginally up to 51.2 in May from 51.1 in April.
In other markets;
Singapore’s Straits Times Index demurred 47.92 points, or 1.5%, to 3,243.43
In Korea, the Kospi Index dipped 30.32 points, or 1.5%, to 1,959.19
Taiwan’s Taiex Index erased 9.31 points, or 0.1%, to 8,181.91
In New Zealand, the Exchange 50 Gross Index slid 20.19 points, or 0.5%, to 4,453.59
Australia’s S&P/ASX faded 65.60 points, or 1.3%, to 4,835.21
