Most Asian markets extended their recent decline Tuesday, as fresh concerns about Europe – including a possible bailout for Cyprus – emerged in the run-up to this week’s European crisis summit.
Japan’s Nikkei Stock Average JP:100000018 -0.50 percent fell 0.8 percent, bringing its week-to-date losses to 1.5 percent, while South Korea’s Kospi KR:SEU -0.21 percent slipped 0.2 percent for a loss of 1.4 percent since Monday morning.
Australia’s S&P/ASX 200 index AU:XJO -0.42 percent dipped 0.4 percent, trading down 0.9 percent so far this week.
In China, the Shanghai Composite Index CN:000001 -0.81 percent lost 0.5 percent, although Hong Kong’s Hang Seng Index HK:HSI -0.07 percent edged up 0.1 percent in volatile trade, supported by gains in the property sector, with its week-to-date losses at 0.4 percent.
Asian losses Monday had spread to the US overnight, as hope faded that a European Union meeting due to start Thursday would produce a blueprint for tackling the region’s problems, and as Cyprus became the latest European country to request financial aid. Read more on Cyprus.
“Risk assets continued their slide ahead of this week’s European Union summit,” said Barclays Capital strategists. “We believe the EU summit… will yield more strong rhetoric in support of a road map toward tighter fiscal integration rather than the endpoint itself.”
Chances of successful negotiations between Greece and its European partners at the summit also appeared to diminish Monday, after the country’s finance minister reportedly resigned just four days after being appointed to the position and three days after hospitalisation for nausea and dizziness.
Concern about Europe helped make blue-chip exporters among Asia’s major decliners Tuesday.
Car makers took a hit, as Honda Motor Co. JP:7267 -1.28 percent HMC -1.53 percent fell 2 percent and Toyota Motor Co. JP:7203 -1.46 percent TM -0.92 percent lost 1.6 percent in Japan, while Hyundai Motor Co. HYMTF +0.51 percent fell 0.8 percent and affiliate Kia Motors Corp. KIMTF +8.02 percent slid 1.7 percent in South Korea.
Sony Corp. JP:6758 -2.38 percent SNE -2.45 percent dropped 2.0 percent, and Panasonic Corp. JP:6752 -1.11 percent PC -0.51 percent, traded down 1.9 percent in Tokyo, with the pair failing to get a boost from an announced tie-up to develop next-generation OLED televisions. Read more on Sony-Panasonic alliance.
Some reports cast the move as an effort to compete with Korean electronics giant Samsung Electronics Co. SSNLF -0.30 percent, which rose 0.7 percent in Seoul, managing to take back some sharp losses made in the previous session, when reports of pressure on the firm’s earnings emerged.
A stronger yen also hurt many Japanese names, with Fujifilm Holdings Corp. JP:4901 -2.95 percent FUJIF -0.97 percent falling 3.2 percent, while Sharp Corp. JP:6753 -2.68 percent SHCAF +9.80 percent lost 2.2 percent, as the dollar USDJPY -0.01 percent bought 79.72 yen, down from its JPY 80.46 level at the end of last week.
The yen is often sought as a safe haven when riskier assets sell off, along with the US dollar. The US currency gained on Monday, and commodities – which are mostly priced in dollars and often move inversely with the dollar – came under some pressure.
Benchmark US oil futures remained below the $80 a barrel mark in Asian electronic trading on Monday, dragging on some energy shares. Japan’s Showa Shell Sekiyu K.K. JP:5002 -1.20 percent SWSKF -33.95 percent lost 1 percent, while JX Holdings Inc. JP:5020 -1.23 percent JXHGF +8.16 percent fell 1.7 percent.
Australian energy firms declining included Woodside Petroleum Ltd AU:WPL -1.56 percent WOPEF -2.81 percent, down 1.1 percent and Linc Energy Ltd, AU:LNC -2.34 percent LNCYF -5.13 percent, lower by 2.3 percent.
Miners also fell in Australia, with BHP Billiton Ltd AU:BHP -1.32 percent BHP -3.21 percent down 1.3 percent for a week-to-date loss of 2.7 percent.
Hong Kong-listed commodity firms also saw some weakness, with PetroChina Co. HK:857 -1.89 percent PTR -2.70 percent down 2.2 percent and Angang Steel Co. HK:347 -0.24 percent ANGGF -32.48 percent dropping 0.5 percent.
However those losses were offset by some strength in the property sector, with China Overseas Land & Investment Ltd HK:688 +1.67 percent CAOVF +3.11 percent and China Resources Land Ltd HK:1109 +0.40 percent CRBJF +12.14 percent each up 1.6 percent. -By Sarah Turner