Stocks in Tokyo plunged Tuesday to lead a broad retreat in Asia, as fears about the U.S. and Japanese economies dragged down shares across sectors, with Sumitomo Mitsui Financial Group and Canon Inc. ranking among the losers.
The benchmark Nikkei 225 index closed down 300.40 points or 2.28% at a one-month low of 12,865.05 while the benchmark Hang Seng index closed down 446.30 points or 2.13% at day's low of 20,484.37.
The Bank of Japan's policy board members voted unanimously to leave interest rates steady, but cut their views on Japan's economy, as it became increasingly apparent that the economy has entered a downturn both at home and abroad. The board agreed to keep the unsecured overnight call loan rate unchanged at 0.50%, the lowest level among Group of Seven nations, marking the 10th consecutive unanimous vote.
In the financial sector, Mitsubishi UFJ Financial Group fell 1.9% after Japan's largest banking group said Monday that it had clinched a deal to take full control of California bank UnionBanCal Corp after sweetening its bid. Sumitomo Mitsui Financial Group lost 2.7%, Resona Holdings dropped 2.8% and Mizuho Financial Group shed 2.1%. Nomura Holdings shed 2.6% and Daiwa securities Group declined 2.5%.
Insurance and steel makers also posted sharp losses. Mitsui Sumitomo Insurance Group Holdings plunged 4.0% and Sompo Japan Insurance tumbled 5.2%. Nippon Steel lost 3.2% and JFE Holdings dropped 3.4%.
Among exporters, Canon tumbled 3.8%, Sony shed 2.3%, Toyota Motor gave away 3.0% and Nissan Motor declined 2.4%. In the tech sector, Advantest slumped 4.9%, Kyocera tumbled 3.0%, Fanuc plummeted 2.6%, Matsushita Electrical Industrial lost 1.1%, NEC shed 3.2% and Fujitsu plunged 4.3%.
In the oil space, oil and gas miner Inpex Holdings edged down 0.1% and Nippon Oil declined 0.8%, while Nippon Mining Holdings plummeted 5.0%.
Bucking the trend JGC Corp surged 3.3%, Mitsui Chemicals advanced 0.5%, Nippon Express climbed 1.7%, Tokyo Gas edged up 0.2% and Yahoo Japan jumped 2.9%.
The Chinese market closed higher, rebounding from Monday's 5.34% plunge, led by power producers and banks. Banks got a boost after China Merchants Bank reported better-than-expected first-half earnings, while power firms gained on hopes for further tariff hikes. The benchmark Shanghai Composite Index closed up 24.60 points or 1.06% at 2,344.47.
China Merchants Bank rose 3.2% after the lender said that first-half net profit rose 116.4% on year-over-year basis to 13.245 billion yuan. The bank also said that it held debt with face value of US$110 million and US$70 million respectively issued by the U.S. mortgage groups Fannie Mae and Freddie Mac at the end of June. It has an unrealized gain of US$1.56 million on these securities. Among other banks, Industrial Bank jumped 4.2% and Huaxia Bank gained 3.9%.
Power producers were higher amid expectations of another round of power-tariff hikes. Huadian Power International advanced 5.8% and GD Power Development climbed 1.9%.
China South Locomotive & Rolling Stock, the country's largest rail equipment maker, surged 7.3% after rising 58.26% on its debut yesterday in Shanghai.
However, coal firms underperformed, with Hebei Jinniu Energy Resources falling 0.8% and China Shenhua Energy losing 1.2%.
In the airline sector, China Southern Airlines advanced 0.8% after the company announced that its first-half net profit surged 368.2% on year-over-year basis to 838 million yuan under Chinese accounting standards. The airline also downgraded its full-year operating targets due to the slowing global economy. Shanghai Airlines edged up 0.2% after the company booked a net profit of 23.41 million yuan compared to a loss of 134.51 million yuan a year earlier.
China Oilfield Services gained 1.6% after the company said that unit COSL Norwegian AS has received acceptances for about 147.65 million shares of Norwegian oil services firm Awilco Offshore ASA, equivalent to a 98.82% stake, at the expiry of its HK$19.5 billion bid for Awilco on August 15.
Elsewhere:
Taiwan's Taiex closed down 0.32% at 6,978.
Singapore's STI closed down 1.75% at 2,728.
Malaysia's KLCI closed down 1.38% at 1,069.
Indonesia's Jakarta Composite index closed down 2.05% at 2,042.
India's Sensex closed down 0.7% at 14,543.
South Korea's Kospi fell 1.7%.
Australia's S&P/ASX 200 gave up 2.4%.
New Zealand's NZX 50 index declined 0.5%.
with files from other wire services
