Asia stocks retreat on global growth concerns; Nikkei sheds 0.7%

Investing.com - Asian stock markets retreated on Monday, as investors turned cautious ahead of a critical European Union summit later in the week, while ongoing concerns over faltering global growth further weighed.

During late Asian trade, Hong Kong's Hang Seng Index dipped 0.2%, Australia’s ASX/200 Index shed 0.5%, while Japan’s Nikkei 225 Index declined 0.7%.

Concerns over the health of the global economy intensified last week after data showed weak U.S. manufacturing activity, a shrinking Chinese factory sector and slowing business activity across the euro zone.

Investors also remained cautious ahead of a European Union summit due to begin later in the week, amid hopes progress on greater fiscal integration and allowing the bloc's rescue funds to buy government debt.

Elsewhere, Spain's government was expected to make a formal request for aid for its banking sector later in the day, after reports on Thursday indicated that Madrid would need a rescue package of as much as EUR62 billion.

In Tokyo, shares in troubled chipmaker Renesas Electronics dropped 2.7% after a Nikkei report said the company will issue nearly JPY50 billion worth of new shares to U.S. investment firm Kohlberg Kravis Roberts & Co.

Shares in NEC slumped 3.15% after a Kyodo News report that tax regulators found the firm concealed more than JPY10 billion in income from 2007 to 2010.
 
On the upside, shares in Panasonic climbed 0.65% after Citigroup raised its rating on the shares from ‘neutral’ to ‘buy’.

Meanwhile, in Hong Kong, shares in raw material producers were lower, amid concerns over a slowdown in demand for commodoities such as copper and oil.

Oil giants PetroChina and Sinopec fell 1.2% and 2.6% respectively, while aluminum producer CHALCO dropped 2.75% and copper miner Jiangxi Copper Company slumped 2.25%.

On the upside, shares in Evergrande Real Estate Group jumped 2.6%, after falling sharply last week amid allegations of fraud from stock-commentary website Citron.

Elsewhere, shares in Australia were dragged lower by losses in mining firms.

BHP Billiton and Rio Tinto slumped 1.45% and 0.5% respectively, while Newcrest Mining declined 3.1%.

Shares in troubled retailer Billabong plunged 47.5% after a heavily discounted share sale. Last week, the company announced a share entitlement offer of six new shares for every seven held at a 44% discount to the price before the offer.

Looking ahead, the outlook for European stock markets was downbeat, as fears over a slowdown in global growth and broad concerns over the ongoing sovereign debt crisis in the euro zone weighed on investor confidence.

The EURO STOXX 50 futures pointed to a loss of 0.85%, France’s CAC 40 futures fell 0.4%, London’s FTSE 100 futures declined 0.4%, while Germany's DAX futures pointed to a drop of 0.45% at the open.

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App

Later Monday, the U.S. was to release official data on new home sales.