Asian stocks down on Europe’s debt worries
Asian stock markets were mostly lower Thursday amid mixed messages from the Fed on how to bolster the fading U.S. economy and as massive European street protests against austerity measures renewed worries about the region’s finances.
Oil prices hovered below $78 a barrel in Asia after strong gains the previous day on a drop in U.S. crude supplies, a sign demand may be improving. The dollar was lower against the yen.
Japan’s benchmark Nikkei 225 stock average lost 190.23 points, or 2 percent, to 9,369.35. Sentiment in Tokyo was also sluggish as Japan’s industrial production fell for the third straight month in August.
South Korea’s Kospi was up 0.3 percent to 1,872.81. Australia’s S&P/ASX 200 was down 1.3 percent at 4,582.9. Hong Kong’s Hang Seng was also down 0.5 percent to 22,278.31. Benchmarks in Singapore, India and Taiwan were down while Thailand, Shanghai and Jakarta were up.
Divisions within the Federal Reserve over how to pump up the U.S. economy — revealed by some Fed officials issuing differing views this week over how effective a fresh round of government-debt buying would be — kept some buyers at bay, analysts said.
“Because they (the Fed) are not making any firm commitments, we get the idea that they are still not very optimistic about the economic recovery,” said Lee Kok Joo, head of research at Phillip Securities in Singapore.
Given the jitters in Europe and the U.S., Lee said fund managers were opting to take profits or otherwise adjust their portfolios to limit losses ahead of a new round of economic indicators, including the U.S. revision of second-quarter gross domestic product.
Thursday’s drop in the Nikkei comes a day after game maker Nintendo slashed its earnings forecast by more than half after announcing its 3-D hand-held game machine, called 3DS, won’t be available in time for the Christmas shopping season. The company’s shares tumbled more than 9 percent Thursday.
The revision also shows Nintendo, which has stood up well among Japanese exporters, is getting battered by the rising yen. A stronger yen reduces profits from overseas sales when the income is brought back to Japan.
Concerns over Europe’s debt problems dampened sentiment on Wall Street with the Dow Jones industrial average falling 22.86 points, or 0.2 percent, to 10,835.28 on Wednesday.
European markets also fell as demonstrators gathered in Brussels, where the European Union is based, and in several of the bloc’s member countries to protest austerity measures aimed at preventing another crisis like the one that required a bailout of Greece earlier this year. The protests raised concerns that countries like Spain will not be able to implement policies required to heal their bloated public finances.
In currencies, the dollar fell to 83.38 yen from 83.78 yen. The euro dropped to $1.3583 from $1.3622.
Benchmark crude for November delivery was down 28 cents to $77.58 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained $1.20 to settle at $77.86 on Wednesday.