Asia stocks sharply lower on EU debt woes; Nikkei drops 1.5%
Investing.com
Published May 23, 2011 02:48AM ET
During late Asian trade, Hong Kong's Hang Seng Index tumbled 2%, South Korea's Kospi Composite plunged 2.6%, while Japan’s Nikkei 225 Index dropped 1.52%.
Ratings agency Fitch downgraded Greece's credit ratings by three notches on Friday, while Standard & Poor’s said Italy’ rating was at risk of a downgrade.
News that Spanish Prime Minister Jose Luis Rodriguez Zapatero led his Socialist party to its worst defeat in more than 30 years in local elections over the weekend exacerbated fears.
Meanwhile, TEPCO saw shares plummet 9% after reporting an annual loss of JPY1.23 trillion, the biggest for a non-financial Japanese company, following the earthquake and tsunami that disabled its Fukushima Daiichi nuclear power plant.
Shares in construction machinery manufacturers performed poorly after Nomura Holdings downgraded the sector and reduced its estimate for sales of the equipment in China by 20% in the year ending in March 2012.
Komatsu saw shares drop 5.9%, shares in Hitachi Construction Machinery tumbled 6%, while Fanuc, an industrial robot maker that gets nearly half of its sales from China slumped 4.05%.
Elsewhere, shares in oil producers declined in Hong Kong after oil prices retreated amid a broadly stronger U.S. dollar.
Oil and gas giant PetroChina saw shares sink 2.5%, shares in China’s largest offshore oil driller CNOOC slumped 1.35%, while China Shenhua Energy saw shares slide 2.6%.
Esprit Holdings, the Hong Kong-based retailer that counts Europe as its largest market dropped 3.4%.
The outlook for European equity markets, meanwhile, was broadly lower. The EURO STOXX 50 futures pointed to a decline of 1%, France’s CAC 40 futures fell 0.85%, the FTSE 100 futures pointed to a drop of 0.8%, while Germany's DAX futures indicated slumped 0.9%.
Later in the day, the euro zone was to publish preliminary data on manufacturing and service sector growth while France and Germany were to publish individual reports.
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Written By: Investing.com
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